Differential Taxation: A Convergence of Interests between American Banking and Government

Differential Taxation: A Convergence of Interests between American Banking and Government
Ostojić, Mladen. (2015). Transnational Institute. 14 January. pp. 1-17. (Article - Magazine; English).

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Alternative Locations

http://www.tni.org/briefing/differential-taxation

Abstract or Brief Description

This paper demonstrates that the interests of American banking and government have converged after the early 1980s and relates this trend to modern financial deregulation, revealing a symbiosis that would later influence the global financial crisis of 2007-2008. An examination of corporate profit and taxation in the United States reveals an anomaly: from the early 1980s until the financial crisis, banking profits after tax sharply outpaced those of the corporate average despite their effective tax rates having simultaneously increased relative to those of the corporate average. These conditions thereby created a mutually beneficial relationship between American banking and government in which banks earned higher profits and the government earned higher tax revenues. However, this tax arrangement ultimately depended on unsustainably deregulated banking profits, and fell apart during the financial crisis of 2007-2008.

Language

English

Publication Type

Article - Magazine

Keywords

banking crisis profit tax United States

Subject

BN Policy
BN Region - North America
BN Business Enterprise
BN Capital & Accumulation
BN Comparative
BN Crisis
BN Distribution
BN Institutions

Depositing User

Jonathan Nitzan

Date Deposited

19 Feb 2015 20:23

Last Modified

09 Apr 2016 20:46

URL:

http://bnarchives.yorku.ca/id/eprint/435

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