The benefits and pitfalls of participating in a corporate inversion: a case study of two companies on two different paths

Even though the term corporate inversion has been heard globally for decades, it has only become more prevalent in the United States during the past two years. This case study examines two United States companies that recently had very high profile and public corporate inversion experiences. Complicated tax laws and high tax rales have long eroded the ability of United States companies to remain competitive on a global scale. During the past two years, tax reform has been elevated to the Presidential and Congressional levei. Because these reform efforts have stalled, however, and in the constant search for ways to become more competitive and profitable, United States dorniciled companies have begun to more aggressively explore corporate inversion. This case study of Walgreens Alliance Boots and Mylan N.V., is undertaken because while the reasons to pursue a corporate inversion for both companies were very similar and done during the same time period, the internai process and final outcome were dramatically different. The other dynamic studied is the role both internai and externai politics had on these two cornpanies and how they influenced the decisions made by the executives. Lastly, the Obama Administration continues to threaten so called "corporate America" to remain in the country through regulatory pressure, but this has not stopped companies frorn pursing corporate inversions. Legislatively, attempts at corporate tax reform, another way to encourage Untied States companies to remain, have also failed. I will not try to determine i f a corporate inversion is the right path for a company to take. I am examining how the rise o f the practice o f corporate inversions has been elevated in boardroorns, on Wall Street, in Congress and at the White House during the past two years.

Contribuição previdenciária sobre a receita bruta: análise crítica e estudo de alternativas

Neste trabalho são analisados os principais aspectos da desoneração da folha de salários. São apresentadas considerações sobre os efeitos fiscais e extrafiscais dos tributos. Em seguida, apresentam-se informações sobre o histórico da Contribuição Previdenciária sobre a Receita Bruta ("CPRB"). Após, analisa-se a adequação da CPRB à CF/88 e conclui-se que a referida contribuição não possui fundamento de validade na CF/88. Em seguida, a CPRB é estudada à luz de princípios constitucionais, administrativos e econômicos considerados relevantes. Conclui-se que (i) o tributo é nocivo por ser cumulativo; (ii) a CPRB não é eficiente, já que a renúncia de receita não foi compensada pelo aumento do emprego nem gerou o desejado desenvolvimento econômico; (iii) a contribuição viola os princípios da isonomia, publicidade, motivação e impessoalidade, pois o regime não é assegurado a todos e não há razões que levem à inclusão de apenas alguns setores econômicos; e (iv) as regras de apuração do novo tributo são complexas. Por fim, sugere-se extinguir a CPRB e promover a redução da tributação sobre a folha (i) no contexto de uma reforma tributária, como a trazida pela PEC 233, ou (ii) acompanhada da majoração de alíquotas de contribuições não-cumulativas, se necessário para compensar a perda de arrecadação.

Essays on health care reform, wealth inequality, and demography

This thesis contains three chapters. The first chapter uses a general equilibrium framework to simulate and compare the long run effects of the Patient Protection and Affordable Care Act (PPACA) and of health care costs reduction policies on macroeconomic variables, government budget, and welfare of individuals. We found that all policies were able to reduce uninsured population, with the PPACA being more effective than cost reductions. The PPACA increased public deficit mainly due to the Medicaid expansion, forcing tax hikes. On the other hand, cost reductions alleviated the fiscal burden of public insurance, reducing public deficit and taxes. Regarding welfare effects, the PPACA as a whole and cost reductions are welfare improving. High welfare gains would be achieved if the U.S. medical costs followed the same trend of OECD countries. Besides, feasible cost reductions are more welfare improving than most of the PPACA components, proving to be a good alternative. The second chapter documents that life cycle general equilibrium models with heterogeneous agents have a very hard time reproducing the American wealth distribution. A common assumption made in this literature is that all young adults enter the economy with no initial assets. In this chapter, we relax this assumption – not supported by the data – and evaluate the ability of an otherwise standard life cycle model to account for the U.S. wealth inequality. The new feature of the model is that agents enter the economy with assets drawn from an initial distribution of assets. We found that heterogeneity with respect to initial wealth is key for this class of models to replicate the data. According to our results, American inequality can be explained almost entirely by the fact that some individuals are lucky enough to be born into wealth, while others are born with few or no assets. The third chapter documents that a common assumption adopted in life cycle general equilibrium models is that the population is stable at steady state, that is, its relative age distribution becomes constant over time. An open question is whether the demographic assumptions commonly adopted in these models in fact imply that the population becomes stable. In this chapter we prove the existence of a stable population in a demographic environment where both the age-specific mortality rates and the population growth rate are constant over time, the setup commonly adopted in life cycle general equilibrium models. Hence, the stability of the population do not need to be taken as assumption in these models.

Health Care Reform or More Affordable Health Care?

This article investigates the impact on the U.S. economy of making health care more affordable. We compare health care cost reductions with the Patient Protection and Affordable Care Act (PPACA) using a rich life cycle general equilibrium model with heterogeneous agents. We found that all policies were able to reduce uninsured population, but the PPACA was the most effective: in the long run, less than 5% of Americans would remain uninsured. Cost reductions alleviated the government budget, while tax hikes were needed to finance the reform. Feasible cost reductions are less welfare improving than the PPACA.