Corporate Tax

Company borrowing prices, COVID mortality, and extra

Studies in these weeks Hutchin’s summary Find Corporate borrowing costs increase with the value of the dollar, Black women have died disproportionately from COVID, and more.

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According to Ralf R. Meisenzahl of the Federal Reserve Bank of Chicago and Friederike, the ups and downs of the US dollar in world markets have a significant impact on the cost and delivery of loans to US companies Niepmann and Tim Schmidt-Eisenlohr of the Federal Reserve Board. You will find that An increase in the US dollar trade-weighted index one standard deviation increases the corporate credit spread by 15 basis points. This relationship is underpinned by the relationship between changes in the dollar price and the demand for risky assets. Fluctuations in the value of the dollar also affect the supply of credit available to companies as the dollar rises, thereby reducing loan amounts. The authors show that changes in the dollar affect not only overseas but also the domestic economy through the corporate credit channel.

Black people were the first and most severely affected by COVID-19, dying in early April 2020 at a rate 2.2 times higher than their share of the total population. This black and white mortality gap was caused by black womenfind Graziella Bertocchi from the University of Modena and Reggio Emilia and Arcangelo Dimico Queen’s University Belfast. Using detailed individual-level data from the Cook County, Illinois medical examiner, the authors find that the overrepresentation of black women in low-paying health, transportation, and storage occupations, and longer, more frequent commutes to work on public transit, is primarily for Responsible for their vulnerability – and not for their age or underlying health conditions. By mapping the home addresses of the deceased on redlining cards from the 1930s, the authors show that the higher likelihood of death among black women is concentrated in previously redlined neighborhoods, reflecting “an ongoing influence of historical racial segregation.”

Hedge funds’ exposure to the US Treasury market increased from $ 1.06 trillion in late 2017 to $ 2.02 trillion by mid-2020 as they were driven by arbitrating the gap between the price of cash and futures prices for Treasury Securities benefitedand acts effectively as a middleman between traders and asset managers. Amid an unusually strong sale of government bonds in March 2020 as money managers tried to raise cash, cash and treasury futures prices diverged, causing hedge funds to wind up. Daniel Barth of the Federal Reserve Board and R. Jay Kahn of the Treasury Department of Finance use data from regulatory submissions and transaction-level data to document the role hedge funds have played in amplifying “unprecedented stress” in the world’s premier wealth market. “Had the Federal Reserve not intervened with huge purchases of government bonds, the disruption would have been far more serious.

Bar chart showing mid-term GDP losses versus pre-COVID in emerging, developing and advanced economies.

“[One] The result of a connected world has been a thirty year race for corporate tax rates. Competitiveness is about more than how companies headquartered in the United States compare to other companies around the world Merger and takeover bids. It is about ensuring that governments have stable tax systems that generate sufficient income to invest in essential public goods and respond to crises, and that all citizens fairly share the burden of funding government. ” says Janet Yellen, Treasury Secretary.

President Biden’s proposals … call for bold domestic action, including raising the US minimum tax rate and renewed international engagement, recognizing the importance of working with other countries to end the pressures of tax competition and the erosion of the corporate tax base . We’re working with the G20 to agree a global minimum corporate tax rate that can stop the race to the ground. Together, we can use a global minimum tax to ensure that the world economy thrives on a level playing field in the taxation of multinational corporations, promoting innovation, growth and prosperity. ”

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