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

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

#161

Post by wingspar »

mikorym wrote: post #78
rsync wrote: post #41

Earlier quoted context omitted.

You are correct that the vast majority of publicly traded companies do not pay dividends. However, that is a small minority of all firms and I hope you will find it interesting to learn that many, many small firms' owners (Doctors offices, car dealers, liquor stores, carwashes, etc.) take regular compensation in the form of dividends. Further, I will point that in the United States, if you are an "S Corp" (and millio…

Why do a majority of publicly traded companies not pay dividends? I've noticed before that for many companies by identifier (ISIN, SEDOL, CUSIP, take your pick) that there are no dividend histories. The only example that I know the reason why is Amazon. [If you buy Amazon stock you either 1) expect dividends at some later stage or 2) plan on selling the stock for a higher price.]

Some companies 'reinvest' profits in their operations and don't pay dividends.

Others avoid dividends, as dividends are profits that are taxed twice. (Once for corporate income taxes, and again for individual income taxes.)

Selling the stock for a higher price has opportunity for favorable tax treatment at the lower long-term capital gains vs dividends taxes as regular income.

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

#162

Post by arcticbull »

oconnor663 wrote: post #133
flexie wrote: post #84

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_…

> Why should tax payers bail out a tax avoiding company? I think that depends on our answer to the prior question, "Why should tax payers bail out any company?" If the answer is "because we like them and we feel a patriotic/moral/righteous duty to help them", then the distinction between tax-paying and tax-avoiding companies does seem relevant. But if the answer is "to help workers keep their jobs", then the distinct…

> "because we like them and we feel a patriotic/moral/righteous duty to help them"

Sounds like an abusive relationship. Again, if a company wants to be bailed out by the tax payer, I don't think it's a stretch to ask that they pay taxes.

Otherwise it's like me, a foreigner with no connection to Denmark other than that I've 'helped the economy' when I went on vacation there last year asking for a bailout.

> But if the answer is "to help workers keep their jobs", then the distinction might not be relevant.

In many European countries, social safety nets exist so you don't have to reward cancerous businesses for terrible business practices, while still ensuring individuals are looked after in the event things go sideways.

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

#163

Post by blimey74 »

chrismeller wrote: post #21

> The government also said that companies which pay out dividends, buy back own shares or are registered in tax havens won’t be eligible for any of the aid programs... Well first off, dividends are a normal method for business owners to make an income... they take all the risk, but reap some limited rewards by taking dividends rather than a salary. Buying back shares I’m fine with. While that could actually be seen a…

But the owners are not "taking all the risk" in this case hence the conditions attached to the Danish state acting as the last financial resort for businesses that are currently in trouble and whose owners cannot do anything about it.

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

#164

Post by elric »

chrisseaton wrote: post #112
benburleson wrote: post #56

Earlier quoted context omitted.

So, the business then has the choice to use last year's profits to keep the business afloat or pay investors. Seems like an easy choice unless your only motivation is lining investor pockets.

> lining investor pockets Investors are often normal people like you and me, using dividends and the sale of shares to put food on their families' tables.

Indeed. The fallacy that all investors are all fat cats, swimming in money is pretty galling. When interest rates on savings accounts dropped, many regular folks took some of their savings and put into dividend paying companies. I'm sure most of them are aware that this is an investment and isn't without risk. I'm certainly not advocating for companies to pay out dividends no matter what. But the lack of nuance bothers me.

Not all dividend paying companies are greedy, and not all dividend investors are wealthy.

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

#165

Post by calcifer »

chrisseaton wrote: post #112
benburleson wrote: post #56

Earlier quoted context omitted.

So, the business then has the choice to use last year's profits to keep the business afloat or pay investors. Seems like an easy choice unless your only motivation is lining investor pockets.

> lining investor pockets Investors are often normal people like you and me, using dividends and the sale of shares to put food on their families' tables.

I've never once met a person who would otherwise go hungry if they didn't get dividends, have you?

What you really mean is those "normal people" would have to sell their third car or maybe rent out their summer home without that dividend, which is just fine by me.

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

#166

Post by RockIslandLine »

sleepychu wrote: post #91
ericmason wrote: post #81

Earlier quoted context omitted.

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

Right but to cut tax you either need to be in a budget surplus, reduce your budget size or enter a budget deficit. If you do that in January then you can't use the same money again in February when things are bad.

Currency issuers are not revenue constrained. For a nation with a fiat currency, the ability to spend is distinct from the need to tax.

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

#167

Post by ardy42 »

chrisseaton wrote: post #151
ardy42 wrote: post #144

Earlier quoted context omitted.

> Many workers are paid a majority of their income in the form of stock from the company they work for. A very small "many." I'd imagine that class consists mostly of highly-placed executives (who can be assumed to be rather wealthy) and some number of people playing the startup lottery.

I think at many large enterprises getting paid in stock is standard for even junior line-worker hires. Google, Microsoft, Amazon, Oracle, etc. People a few years into their career are often paid a majority in stock.

> I think at many large enterprises getting paid in stock is standard for even junior line-worker hires. Google, Microsoft, Amazon, Oracle, etc. People a few years into their career are often paid a majority in stock.

Maybe at FAANG companies (whose FTE workers tend to be very well off) and some other companies with a startup lineage, but I highly doubt this is very widespread.

I, for one, would frankly refuse a compensation package that was majority stock, unless the salary was already good. It'd be too much like those Enron employees who filled their 401ks with Enron stock -- too many eggs in one basket.

If someone who's otherwise well-compensated complains about missing out on dividends on their stock, I have the world's smallest violin here, ready to play a song for them.

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

#168

Post by dathinab »

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.

Companies exists to:

1. Produce products, especially essential ones.

2. Give people work, so that they can afford products. Especially essential ones.

Everything else is just (potentially useful) junk capitalism added on top of it. So even if the concept of dividends would be forbidden many thinks would still go on like before, companies would still exist and make sense. Just the stock marked would probably be gone. Maybe that wouldn't be so bad IMHO.

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

#170

Post by ativzzz »

1cvmask wrote: post #83

Why doesn’t the government just write a check to individuals and let them spend the money instead of bailing out companies in most countries?

1. Many businesses are closed at the moment due to lockdowns

2. During a recession, people will save that money and not spend it

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