The Effective Tax Rate and the Pretax Rate of Return

This paper presents new estimates of the taxes paid on nonfinancial corporate capital, on the pretax rate of return to capital, and on the effective tax rate. The basic time series show that both the pretax rate of return and the effective tax rate have varied substantially in the past quarter century. An explicit analysis indicates that, after adjusting for different aspects of the business cycle, pretax profitability was between one and 1.5 percentage points lower in the 1970's than in the 1960's. The rate of profitability in the 1960's was also about one-half of a percentage point greater than the profitability in the 7 years of the 1950's after the Korean war. Changes in productivity growth, in inflation, in relative unit labor costs, and in other variables are all associated with changes in profitability. None of these variables, however, can explain the differences in profitability between the 1950Ts, 1960's and 1970's. Looking at broad decade averages, the effective tax rate and the pretax rate of return move in opposite directions, higher pretax profits occurring when the tax rate is high. There thus appears to have been no tendency for pretax profits to vary in a way that offsets differences in effective tax rates.

Unemployment Insurance and Reservation Wages

The present paper examines the reservation wages reported by a largesample of unemployed individuals in the United States in May 1976. The majorityof unemployedindividuals report reservation wages that are at least as highas the wage they were paid on their last job. Approximately one-fourth of alljob seekers required a wage that is at least 10 percent higher than the wage ontheir previous job.Our econometric evidence shows that the level of unemployment benefitsrelative to previous wages has a powerful effect on the individual's reservation wage. A ten percent increase in the U.I. replacement ratio increases the reservation wage by about percent for job losers who are not on layoff and bysomewhat less for other unemployed groups. Separate regressions to analyze the high reservation wage per se show that a ten percent increase in the U.I. replacement ratio also increases by about four percentage points the probability that an unemployed individual will require a wage increase of 10 percent or more.These estimates imply that reducing net unemployment insurance benefits (by lowering gross benefits or by taxing unemployment benefits) could significantly lower the average duration of unemployment and the relative number of long duration spells of unemployment. Because of the non-linear response of the unemployment duration to the reservation wage, reducing a high unemployment insurance ratio by ten percentage points is likely to have a greater impact on unemployment than reducing a low unemployment insurance ratio by ten percentage points.

State and Local Taxes and the Rate of Return on Nonfinancial Corporate Capital (revised as W0740)

Although states and localities collect a substantial amount of revenue from corporate profits taxes and property taxes on corporate capital, these taxes have been inadequately reflected in previous calculations of the effective corporate tax rate and the pretax rate of return to corporate capital. The present study focuses on non-financial corporations and begins by estimating the profits taxes and property taxes which these corporations pay to state and local governments. These estimates are then used to calculate the pretax rate of return on non-financial corporate capital; the results suggest that the conventional omission of state-local property taxes leads to an understatement of this rate of return by about one percentage point. The effective tax rate on non-financial corporate profits is also computed, taking account of state-local taxes. These taxes amount to approximately sixteen percent of the pretax profits of non-financial corporations. The total effective tax rate on these corporations is shown to have risen substantially during the past two decades; it averaged more than seventy percent in the most recent five-year period. The series for the rate of return and effective tax rate are used to compute the real after-tax rate of return on non-financial corporate capital. The calculations show that this number has declined recently, reaching 2.3 percent in 1979. This is to be contrasted with after-tax returns of over five percent which prevailed during the mid-1960s.

System and method for moving a probe to follow movements of tissue

An apparatus is described for moving a probe that engages moving living tissue such as a heart or an artery that is penetrated by the probe, which moves the probe in synchronism with the tissue to maintain the probe at a constant location with respect to the tissue. The apparatus includes a servo positioner which moves a servo member to maintain a constant distance from a sensed object while applying very little force to the sensed object, and a follower having a stirrup at one end resting on a surface of the living tissue and another end carrying a sensed object adjacent to the servo member. A probe holder has one end mounted on the servo member and another end which holds the probe

A Case Where Barro Expectations Are Not Rational

This note generalizes Feldstein’s (1976) criticism of Barro’s(1974) analysis for the case that the interest rate exceeds the growth rate. This is done by considering an economy in steady state where all agents hold “Barro expectations”: they believe that government debt must necessarily be repaid and therefore leave the present value of their income streams unchanged. In this scenario, a change in the mode of taxation affects the present value of disposable income in the private sector. This violates their Barro expectations

On the new economic philosophy of crisis management in the European Union

This essay attempts to go beyond presenting the bits and pieces of still ongoing crisis management in the EU. Instead it attempts at finding the ‘red thread’ behind a series of politically improvised decisions. Our fundamental research question asks whether basic economic lessons learned in the 1970s are still valid. Namely, that a crises emanating from either structural or regulatory weaknesses cannot and should not be remedied by demand management. Our second research question is the following: Can lacking internal commitment and conviction in any member state be replaced or substituted by external pressure or formalized procedures and sanctions? Under those angles we analyze the project on establishing a fiscal and banking union in the EU, as approved by the Council in December 2012

A Simple Explanation for DAMA with Moderate Channeling

We consider the possibility that the DAMA signal arises from channeled events in simple models where the dark matter interaction with nuclei is suppressed at small momenta. As with the standard WIMP, these models have two parameters (the dark matter mass and the size of the cross-section), without the need to introduce an additional energy threshold type of parameter. We find that they can be consistent with channeling fractions as low as about ~ 15%, so long as at least ~70% of the nuclear recoil energy for channeled events is deposited electronically. Given that there are reasons not to expect very large channeling fractions, these scenarios make the channeling explanation of DAMA much more compelling.Comment: 6 pages, 2 figure

International capital mobility in an era of globalisation: adding a political dimension to the 'Feldstein–Horioka Puzzle'

The debate about the scope of feasible policy-making in an era of globalisation continues to be set within the context of an assumption that national capital markets are now perfectly integrated at the international level. However, the empirical evidence on international capital mobility contradicts such an assumption. As a consequence, a significant puzzle remains. Why is it, in a world in which the observed pattern of capital flows is indicative of a far from globalised reality, that public policy continues to be constructed in line with more extreme variants of the globalisation hypothesis? I attempt to solve this puzzle by arguing that ideas about global capital market integration have an independent causal impact on political outcomes which extends beyond that which can be attributed to the extent of their actual integration

Lipid-induced hepatocyte-derived extracellular vesicles regulate hepatic stellate cell via microRNAs targeting PPAR-γ.

Background&aimsHepatic stellate cells (HSCs) play a key role in liver fibrosis in various chronic liver disorders including nonalcoholic fatty liver disease (NAFLD). The development of liver fibrosis requires a phenotypic switch from quiescent to activated HSCs. The triggers for HSCs activation in NAFLD remain poorly understood. We investigated the role and molecular mechanism of extracellular vesicles (EVs) released by hepatocytes during lipotoxicity in modulation of HSC phenotype.MethodsEVs were isolated from fat-laden hepatocytes by differential centrifugation and incubated with HSCs. EV internalization and HSCs activation, migration and proliferation were assessed. Loss- and gain-of-functions studies were performed to explore the potential role of PPAR-γ-targeting miRNAs carried by EVs into HSC.ResultsHepatocyte-derived EVs released during lipotoxicity are efficiently internalized by HSCs resulting in their activation, as shown by marked up-regulation of pro-fibrogenic genes (Collagen-I, α-SMA and TIMP-2), proliferation, chemotaxis and wound healing responses. These changes were associated with miRNAs shuttled by EVs and suppression of PPAR-γ expression in HSC. Hepatocyte-derived EVs miRNA content included various miRNAs that are known inhibitors of PPAR-γ expression with miR-128-3p being the most effectively transferred. Furthermore loss- and gain-of-function studies identified miR-128-3p as a central modulator of the effects of EVs on PPAR-γ inhibition and HSC activation.ConclusionOur findings demonstrate a link between fat-laden hepatocyte-derived EVs and liver fibrosis and have potential implications for the development of novel anti-fibrotic targets for NAFLD and other fibrotic diseases

New Constraints from PAMELA anti-proton data on Annihilating and Decaying Dark Matter

Recently the PAMELA experiment has released its updated anti-proton flux and anti-proton to proton flux ratio data up to energies of ~200GeV. With no clear excess of cosmic ray anti-protons at high energies, one can extend constraints on the production of anti-protons from dark matter. In this letter, we consider both the cases of dark matter annihilating and decaying into standard model particles that produce significant numbers of anti-protons. We provide two sets of constraints on the annihilation cross-sections/decay lifetimes. In the one set of constraints we ignore any source of anti-protons other than dark matter, which give the highest allowed cross-sections/inverse lifetimes. In the other set we include also anti-protons produced in collisions of cosmic rays with interstellar medium nuclei, getting tighter but more realistic constraints on the annihilation cross-sections/decay lifetimes.Comment: 7 pages, 3 figures, 3 table