Greenspan gets it wrong

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Alan Greenspan has guru status with some. But according to the FT he has said:

The US needs to reduce corporate tax rates to prevent business profits from being squeezed by the rising cost of raising finance through debt and equities, Alan Greenspan, former Federal Reserve chairman, warned

That's ridiculous. It assumes that debt and equities have the same tax structure, and they don't. Debt gets tax relief, equities don't.

And as debt is the preferred financing route for corporations these days (part of a conspiracy to ensure as few new shares as possible are issued so that the price of those available rises as pension money is forced daily into the stock market) then cutting tax rates at this time makes no sense: that reduces the tax relief on the cost of debt capital, so increasing its cost, which is the exact opposite of what Greenspan says he wants.

This man is no guru, he's just a bog standard tax hater looking for any place to hang his hat, whether appropriate or not. Which puts him amongst all the others who argue for tax cuts without any logic being presented to support their case. That does not make him a guru: it makes him someone who is past his listen-to date.