Many countries tax systems hugely favor debt over equity.

One of them is a reserve requirement on cross border flows successfully implemented in Chile, Colombia, and elsewhere or, even better, on cross border liabilities. Taxes on inflows can play a similar role, as can minimum stay periods for capital inflows.

Property or capital gains taxes could help curb demand for housing as an investment vehicle.

That is in addition to explicit tax hikes on income, capital gains, and dividends, the implicit ones on energy via cap and trade, etc. It appears that the Obama strategy is to stuff the beast (the mirror image of the tax cutting starve the beast philosophy attributed to some of President Ronald Reagan s advisers), i.e., to initiate massive spending and hide the true cost from citizens.

Strauss Kahn s response that taxes on capital flows are costly and ineffective is therefore unfortunate.

Unfortunately, any country that taxes capital too aggressively will only succeed in chasing it to regions where the tax burden is lighter.

But, lacking capital and forced to pay taxes, what fate awaits industries driven by the state into the market?

As above, firm value is enhanced when, and if, the return on capital exceeds the cost of capital.

Governments do not tax the return on equity less than debt interest, and lenders do not sufficiently honor the benefits of high equity with lower interest rates, owing to a lack of information about the true repayment probability.

Brazil has been aggressive in terms of capital restrictions, twice increasing its tax on financial inflows.

Inflation remains contained, but, more to the point, China s government has an arsenal of other weapons (from taxes on capital inflows and capital gains taxes to a variety of monetary instruments) at its disposal.

The International Monetary Fund has put its stamp of approval on capital controls, thereby legitimizing the use of taxes and other restrictions on cross border financial flows.

Initial capital

Moreover, Li has called upon the banking sector to reinvigorate idle capital and allocate incremental capital more effectively.

The United States is emphasizing higher capital requirements.

The Art of Capital Flight

Damming Capital

The Capital Flow Conundrum

Capital flows and remittances

E. Financial capital and resilience

The portion of capital inflows that is not re exported represents net capital inflows.

For example, thenet cash flow to total invested capital and WACC are appropriate when valuing a company based on the market value of all invested capital.

The Siren Song of Capital Controls

Investment and private flows

(o) Working Capital Fund

The top personal income tax rate (also levied on capital gains), the sales tax rate, the corporate tax rate, and the gas tax are all at or near the highest of any state.

Northern taxpayers will be forced to inject massive amounts of capital into banks, even if the authorities impose significant losses on banks large and wholesale creditors, as well they should.

व श व क प ज क र ख फ र ट यर क ओर

Jacqueline Novogratz on patient capitalism

The reason lies in capital movements.

Finally, there is the path of public capital.

Surviving the Great Capital Flood

Raising capital is expensive.

The Temptation of China s Capital Account

List of tables

Similarly, banks would have incentives to game capital adequacy requirements by manipulating how capital and assets are defined.

If, on the other hand, market participants do bear significant costs either because of the taxes they pay or because of the expenses they incur to evade them the controls will be effective in restraining inflows.

Before World War II, venture capital investments (originally known as development capital ) were primarily the domain of wealthy individuals and families.

This is why equity capital held by financial institutions typically is more than twice as expensive as debt capital and why these institutions try to minimize its use.

Direct interventions, restrictions on short term capital inflows, capital gains taxes, and stabilizing prudential banking regulations will all have to be considered.

CAMBRIDGE It s official. The International Monetary Fund has put its stamp of approval on capital controls, thereby legitimizing the use of taxes and other restrictions on cross border financial flows.

A tax cut to low income individuals or increased unemployment benefits would have provided far more stimulus to consumption, just as a temporary investment tax credit would have boosted capital spending far more than reducing taxes on dividends did.

There are no income, estate or capital gains taxes.

The advantage of equity capital is that it is loss absorbing, meaning that only after losses wipe out all of the equity do they need to be apportioned between creditors.

The taboo that has attached to capital controls has discouraged practical, policy oriented work that would help governments to manage capital flows directly.