Harvard Business School professor Mihir Desai believes American companies and investment firms have erred–horribly–by linking manager compensation so tightly to financial market performance. In the current Harvard Business Review, he identifies this as a giant FIB, a Financial Incentive Bubble: American capitalism has been transformed over the past three decades by the idea that financial [...]
Archive for February, 2012
Is Incentive Compensation a Giant FIB?
Posted in Business, Finance, Microeconomics, tagged Business, Finance, Incentives, Inequality on February 28, 2012 | 5 Comments »
The Coming Budget Showdown of 2012
Posted in Budget, Politics, tagged Budget, Politics, Taxes on February 27, 2012 | Leave a Comment »
My latest column at the Christian Science Monitor discusses the many fiscal pressures that will come to a head at the end of the year. Here’s an excerpt: Start with our tattered tax code, which now contains a six-pack of temporary tax cuts. The largest are the Bush-era cuts originally enacted in 2001 and 2003 [...]
Bruce Bartlett’s Excellent Guide to Tax Reform
Posted in Taxes, tagged Book, Book Review, Taxes on February 26, 2012 | 6 Comments »
The tax code is like a garden. Without regular attention, it grows weeds that will soon overwhelm the plants and flowers. Unfortunately, no serious weeding has been done to the tax code since 1986. In the meantime, many new plants and flowers have been added without regard to the overall aesthetic of the garden. The [...]
Inspirations, A Vision of Escher’s Workspace
Posted in Uncategorized, tagged Art, Mathematics on February 25, 2012 | 1 Comment »
If you are a Godel, Escher, Bach kind of person, this short film is for you. Cristobal Vila presents Inspirations: ht: Open Culture via @brainpicker
Playing Favorites in the Corporate Tax Code
Posted in Budget, Taxes, tagged Business, Corporate Income Tax, Obama, Taxes, Treasury on February 24, 2012 | 4 Comments »
The President’s new Framework for Business Tax Reform is two documents in one. The first diagnoses the many flaws in America’s business tax system, and the second offers a framework for fixing them. Much of the resulting commentary has focused on the policy recommendations. But I’d like to give a shout out to the diagnosis. [...]
The Miracle of Chained Kidney Transplants
Posted in Microeconomics, tagged Kidneys, Microeconomics, Organs on February 19, 2012 | 1 Comment »
Most modern markets operate on money. I sell my services as an economist, for example, and use the proceeds to buy Tazo Tea, vacation trips, and a surprising number of Apple products. But that approach doesn’t transplant well (so to speak) to living human organs. Many people find the idea of markets in organs repugnant. [...]
Five Principles for Fixing America’s Tax System
Posted in Budget, Taxes, tagged Budget, Politics, Taxes on February 17, 2012 | 8 Comments »
The International Economy recently invited me to contribute to a forum on how best to fix America’s tax system. Here’s my piece; for eleven other views, check out the complete forum. America’s tax system is a mess. It’s needlessly complicated, economically harmful, and often unfair. And it doesn’t raise enough money to pay our bills. That’s why almost everyone agrees [...]
How Would the Buffett Rule Affect Marginal Tax Rates?
Posted in Budget, Taxes, tagged Taxes, Warren Buffett on February 15, 2012 | 2 Comments »
President Obama’s latest budget endorses a “Buffett rule” – a new floor on taxes paid by folks with very high incomes. His rule would require that “those making over $1 million should pay no less than 30 percent of their income in taxes.” The president didn’t offer many specifics about how the rule would actually work. Up on Capitol [...]
Financial Answers Made Simple
Posted in Business, Finance, tagged Finance, Start Up on February 12, 2012 | 3 Comments »
For the past year, I have been advising a start-up, FedWise LLC, that is working to improve American’s financial literacy. (Full disclosure: I have a small interest in the company.) FedWise’s vision is simple: to provide helpful, unbiased, reliable information to consumers about financial products and services like mortgages and credit cards. The company recently [...]
The 102% Tax Rate and Other Perils Measuring Tax Rates
Posted in Budget, Taxes, tagged Measurement, New York Times, Taxes on February 8, 2012 | 3 Comments »
Over at the Tax Policy Center’s blog, TaxVox, my colleague Roberton Williams examines the pitfalls that afflict some efforts to measure a person’s tax rate: Investment manager James Ross last week told New York Times columnist James Stewart that his combined federal, state, and local tax rate was 102 percent. No doubt, Ross did pay a lot [...]
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