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State Finance In Times Of Crisis, Brian Galle, Jonathan Klick
State Finance In Times Of Crisis, Brian Galle, Jonathan Klick
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As recent events illustrate, state finances are pro-cyclical: during recessions, state revenues crash, worsening the effects of economic downturns. This problem is well-known, yet persistent. We argue here that, in light of predictable federalism and political economy dynamics, states will be unable to change this situation on their own. Additionally, we note that many possible federal remedies may result in worse problems, such as creating moral hazard that would induce states to take on excessively risky policy, both fiscal and otherwise. Thus, we argue that policy makers should consider so-called “automatic” stabilizers, such as are found in the federal tax …
Samuel Zell, The Chicago Tribune, And The Emergence Of The S Esop: Understanding The Tax Advantages And Disadvantages Of S Esops, Michael S. Knoll
Samuel Zell, The Chicago Tribune, And The Emergence Of The S Esop: Understanding The Tax Advantages And Disadvantages Of S Esops, Michael S. Knoll
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Samuel Zell’s acquisition of the Chicago Tribune Company (the Tribune) in December 2007 using a little-known type of Employee Stock Ownership Plan (ESOP) made headlines. In a complicated transaction, which took nearly a year to complete, the Tribune converted from a subchapter C corporation to a subchapter S corporation, established an ESOP that purchased 100 percent of the company’s equity, and sold Zell a call option giving him the right to purchase 40 percent of the company’s equity. Press reports claim that Zell’s novel structure enabled Zell to outbid other suitors. And financial commentators predict that many acquirers will employ …