Michael Faulkender

12 Big Things That Will Shape Business in 2017

It's nearly New Year.It's almost a new year, and across the University of Maryland's Robert H. Smith School of Business, some prognosticating has begun. We asked a group of professors to look ahead at the trends and developments we might see in the next 12 months. They turned their focus to the stock market, tax policy, Amazon, McDonald's, finance, real estate, Obamacare and more. Here's what they said. Read more...

Under President Trump: Six Questions on the Economy

The question of who will be the 45th U.S. president has been answered with the upset victory of Republican Donald Trump. Now many are asking what U.S. economic policy will look like under his administration. Smith School experts will explore some of the larger economic questions facing the new administration at a pair of events next week in Washington, D.C. Here is a snapshot of some of the big issues they will discuss. Read more...

The Science of Contracts Behind the 2016 Economics Nobel

Contracts help human beings do what at times seems impossible. They help us cooperate and trust each other. It’s not that we fundamentally don’t trust one another. It’s just that trust is a freer-flowing currency when agreements are backed by a contract. And that’s why contract theory became the premise for the 2016 Nobel prize for economics on Monday. Smith School professors Kislaya Prasad and Michael Faulkender help explain why the theory is so important. Read more...

'Secret Sweetheart' Tax Deal Entangles McDonald's

The European Commission last week released details of its ongoing investigation of a Luxembourg-McDonald’s “sweetheart” tax deal and shined new light on “Europe’s new tax raid.” Regulators are focusing, in part, on Luxembourg as a tax haven. The deal gives a window to the complexity of interpreting and regulating cross-border tax rules and advance pricing arrangements, says Smith School finance professor Michael Faulkender. While responsibility lies with governments to manage these processes, Faulkender says McDonald’s and other companies are acting dutifully to their shareholders. Read more...

Treasury Targets Corporate Inversions, Drawing Ire of CEOs

Treasury continues to tighten its rules to prevent corporate "inversions" — the move in which a U.S. company merges with a smaller foreign company then shifts its official location abroad, to avoid U.S. taxes. Given the lack of congressional action on this issue, the new rule appears "reasonable," says the Smith School's Michael Faulkender. Still, he says, the U.S. tax system is "broken." Read more ...

High Corporate Taxes Incentivize Corporate Debt

Multinational American companies with significant operations in countries with low corporate taxes take on less debt than companies that face higher taxes, according to a new study from the Smith School. A link between higher corporate taxes and debt levels is predicted by economic theory, but some recent studies have failed to find such a connection. In this new study, however, the authors assume U.S. companies will keep their foreign profits abroad indefinitely. Read more ...

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