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

bloomberg.com

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

#91

Post by sleepychu »

ericmason wrote: post #81
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.

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.

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

#92

Post by gspr »

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.

Develop itself and its product for future success?

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

#93

Post by iffybookmark »

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.

Exactly. So, give breaks to companies that cannot pay dividends, because the ones that do are the ones who are obviously signaling that they are fine.

This isn't some slam against paying dividends, though. I do agree with you. I am fascinated at companies like Snapchat whose shares command no voting power and do not pay a dividend.

However, as far as signals go, "here, we are so well capitalized that we think you can invest this money better than we can" is pretty strongly saying your company is in good financial shape.

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

#94

Post by MiroF »

WrtCdEvrydy wrote: post #85
tonyedgecombe wrote: post #79

Earlier quoted context omitted.

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.

> you buy the stock or sell it based on their current profits.

Yes, based on the anticipation of future dividends and share buybacks. Stock trading is more than just gambling but for profits.

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

#95

Post by xchaotic »

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.

You mean like Amazon? The stock price rises and if you want out you sell some.

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

#96

Post by bitcurious »

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.…

I don’t think corporate tax break would actually be a useful tool right now - corporate taxes are on profits and the profits are going to tank for most businesses.

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

#97

Post by mjul »

The article lacks some details. If you read the Danish text detailing this from the Ministry of Commerce you will see that:

Regarding buy-backs and dividends, companies receiving more than 60 million DKK in subsidy for fixed costs have to promise no buy-backs and dividends in fiscal years 2020 and 2021. If they pay back the subsidy they will be freed from this obligation.

60 million DKK is approximately 8.7 million USD or 8 million EUR.

Regarding "tax havens", the legislation states that the companies receiving these subsidies have to pay their taxes according to national rules and international agreements. Companies based in EU-defined "tax havens" will not be eligible for compensation unless denying them compensation would violate EU legislation or other international agreements.

You can read the press release and legislation from the Ministry of Commerce in Danish here:

https://em.dk/nyhedsarkiv/2020/april/covid-19-regeringen-og-...

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

#98

Post by ajross »

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?

One rational reason is that there's a desire to preserve the state of the economy to speed the eventual recovery. Writing checks to a restaurant to keep its staff employed (but idle) vs. writing checks to the employees is the same from the perspective of the employees. But it also means the restaurant is going to fail.

Opening the doors of an idle restaurant at the end of the lockdown is a lot cheaper and more efficient than starting up an entirely new one.

A less rational reason, of course, is that the policymakers writing the bailout laws tend personally to be more affiliated with and sympathetic to business owners than employees. There is some of that too.

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

#99

Post by onion2k »

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.

Like Google? Or Facebook? Or Tesla?

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

#100

Post by MiroF »

iffybookmark wrote: post #93
tonyedgecombe wrote: post #79

Earlier quoted context omitted.

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

Exactly. So, give breaks to companies that cannot pay dividends, because the ones that do are the ones who are obviously signaling that they are fine. This isn't some slam against paying dividends, though. I do agree with you. I am fascinated at companies like Snapchat whose shares command no voting power and do not pay a dividend. However, as far as signals go, "here, we are so well capitalized that we think you can…

> So, give breaks to companies that cannot pay dividends, because the ones that do are the ones who are obviously signaling that they are fine.

This is correct - but the opposite of the GP comment.

> I am fascinated at companies like Snapchat whose shares command no voting power and do not pay a dividend.

Pricing here is based on the anticipation of future dividends or buybacks.

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