Politics and Investing

During the last presidential campaign, one thing that came up that bothered me was a statement by one candidate that he was going to close the loophole for companies to ship jobs overseas, in order to save job.  (Sounds good right, who wouldn’t want to save jobs? – except of course his opponent… who is obviously boneheaded!)

After a little research earlier, i found that this “loophole” that was mentioned is purely because the US has one of the higher corporate tax rates of all the countries, so if a US company pays taxes at a lower rate in another country for a good or service that they sell in that other country they have found a loophole.

Just today, I was reading this article from PricewaterhouseCoopers on the implications of the president’s proposal to close this loophole, and a bit of a discussion on if it is a good idea and how the proposed plan would affect US companies (and consequently your investing decisions). The article is called “10 minutes on…”, so its a pretty quick read.

pwc-10minutes-tax-increases.pdf

So, besides the article content which i wanted to highlight, its also a reminder to question politicians when they promise something that sounds so good, before you jump on the euphoric wagon.

For other “10 minute” articles by PwC click the following link.

http://www.pwc.com/extweb/pwcpublications.nsf/docid/62BD6CCECDE0D12D852573E0000C623B