Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Denmark: No aid for companies which pay out dividends or are reg. in tax havens

bloomberg.com

Post reply on HN
Print view View original

81–90 of 308 posts

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#81

Post by ericmason »

yalogin wrote: post #69

I keep saying over and over but the economic policy is something trump fucked up big time. He gave away the corporate tax breaks in times of prosperity when there was no need and the companies just made bank. He was dealt a great hand, a strong economy that would chug along no matter who the president was. Those are the times to focus on the poor and lift people up. Instead he wasted his opportunity on the tax cuts.…

Trump cut taxes on corporate profits. That only helps when there are actually profits, so it would not do much right now.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#82

Post by anonymousDan »

Ididntdothis wrote: post #45
elric wrote: post #22

Earlier quoted context omitted.

It's probably a bit more nuanced than that. Dividends are often scheduled months in advance, based on (for instance) last year's profits. Having made a profit last year, and having promised a dividend months before corona doesn't mean you won't be struggling now.

Is the promise of dividends binding? I don’t think so.

It's not. The stock price will likely take a hit, but such is life.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#84

Post by flexie »

Danish lawyer here.

The proposal only limits payments to companies that have received more than DKK 60 million (around EUR 8 million) in aid. So this is not your usual business owner. These are generally larger companies with a well paid management.

As for companies registered in tax havens, the EU has made an official list of tax havens, which will be followed: https://en.wikipedia.org/wiki/European_Union_tax_haven_black...

It's a short list and it doesn't include any countries where a large company doing business in Denmark would be registered except if they try to avoid taxes. Why should tax payers bail out a tax avoiding company?

The proposal was made by a party in the opposition, which is usually seen as most business friendly ("Venstre"). Interest groups representing the businesses in Denmark support the proposal. I think it's a common sense proposal. Paying out dividends to shareholders while receiving government aid basically means having the tax payers bail out the business owners.

I honestly think the proposal should go even further. The government should take a small ownership stake in companies that receive that kind of money.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#85

Post by WrtCdEvrydy »

tonyedgecombe wrote: post #79
Saaster wrote: post #27

It's a good common sense start. Companies that pay dividends or make share buy-backs are more vulnerable in a crisis (not only the current one), meaning they are riskier investments. Risk needs to be inversely correlated with reward for the markets to function. Investors in riskier companies deserve to get wiped out, not propped up. Companies registered in tax-havens should have no business applying for EU or US aid.…

Companies that pay dividends What’s the point of a company that never pays a dividend.

Most tech companies don't dividend... you buy the stock or sell it based on their current profits.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#86

Post by chrisseaton »

throwaway2048 wrote: post #61
chrisseaton wrote: post #46

Earlier quoted context omitted.

Paying a dividend is paying a person. It's like you're saying that 'as long as they can afford to keep paying employees' they don't need aid. Would you rather they stopped paying people but didn't take aid? The whole point of the aid is so they can keep going and keep paying people.

Return from investment is nothing like salary.

Many workers are paid a majority of their income in the form of stock from the company they work for.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#87

Post by dijit »

tonyedgecombe wrote: post #79
Saaster wrote: post #27

It's a good common sense start. Companies that pay dividends or make share buy-backs are more vulnerable in a crisis (not only the current one), meaning they are riskier investments. Risk needs to be inversely correlated with reward for the markets to function. Investors in riskier companies deserve to get wiped out, not propped up. Companies registered in tax-havens should have no business applying for EU or US aid.…

Companies that pay dividends What’s the point of a company that never pays a dividend.

Not sure, maybe something to do with providing work and services?

Maybe you mean "whats the point in investing in a company that will never pay dividends".

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#88

Post by ajross »

Nextgrid wrote: post #2

Maybe I'm not understanding something but why do they consider paying dividends as something bad? They are essentially excluding the majority of businesses using this criteria.

Dividends are, literally, the profits you're distributing to your owners. Buybacks, likewise, are giving corporate money directly to your owners (who then divest from the company in the process, of course). This isn't "bad", it's fine. It's the basic idea of how the stock market is supposed to work, we buy shares in companies we think will make money.

But by definition if you have cash to distribute to your owners, you could be using that to pay salaries instead and delay or avoid layoffs and furloughs. So it's very reasonable that a government bailout policy designed to prevent job losses (and not to shore up shareholder value) would incentivize giving money to the people who are targetted and not shareholders.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#89

Post by xchaotic »

yalogin wrote: post #69

I keep saying over and over but the economic policy is something trump fucked up big time. He gave away the corporate tax breaks in times of prosperity when there was no need and the companies just made bank. He was dealt a great hand, a strong economy that would chug along no matter who the president was. Those are the times to focus on the poor and lift people up. Instead he wasted his opportunity on the tax cuts.…

Not that relevant as the shock is slump in demand. Printing more money etc makes it cheaper to buy things but people are still not buying so oil etc is in a free fall. Traditional interest rate based intervention doesn’t make sense you are just adding even more money available to a system that doesn’t want to spend it. Instead it needs to be targeted intervention that transitions the economy to the new reality and measures something different than quarterly gdp.

Re: Denmark: No aid for companies which pay out dividends or are reg. in tax havens

#90

Post by MiroF »

Saaster wrote: post #27

It's a good common sense start. Companies that pay dividends or make share buy-backs are more vulnerable in a crisis (not only the current one), meaning they are riskier investments. Risk needs to be inversely correlated with reward for the markets to function. Investors in riskier companies deserve to get wiped out, not propped up. Companies registered in tax-havens should have no business applying for EU or US aid.…

> Companies that pay dividends or make share buy-backs are more vulnerable in a crisis

All public companies are anticipated to pay dividends or buy-back at some point in time, it's what underlies stock pricing.

Post reply on HN