Paul Ryan preps bold corporate tax plan [Boston Herald]

While almost everyone agrees that the current U.S. system for taxing foreign proäts of American corporations is counterproductive, there has been heated partisan debate about what should be done. Now, with Republican dominance of Congress and the White House, we should look carefully at House Speaker Paul Ryan’s path-breaking plan for corporate tax reform.

Under current law, foreign proäts of American corporations are legally subject to a 35 percent U.S. tax — the highest corporate tax rate among industrialized countries. In fact, American corporations do not pay this tax unless and until they bring these foreign proäts back to the U.S.

Thus, the current system mainly beneäts tax lawyers and accountants.

Read the rest at bostonherald.com

The Board’s Role in Share Repurchases [MITSloan Management Review]

In many companies, decisions about the level and timing of share repurchases are left mainly to the management. But given their importance, corporate directors should probably pay closer attention.

Capital allocation is a significant function for company directors. How much of the company’s profits gets reinvested in the business rather than distributed to shareholders through cash dividends or share repurchases is a critical decision companies must make. Boards of directors typically approve a dividend policy and precise amounts for each quarter: Everyone knows that cutting the dividend will result in a sharp decline in the share price.

Read the rest at sloanreview.mit.edu…