Mihir Desai

Corporations are the cornerstone of both the House and Senate versions of the tax overhaul. Both bills propose deep cuts in the corporate tax rate — from 35 percent to 20 percent. The bills also call for a territorial tax system to replace the current worldwide tax system, in which multinational corporations with headquarters in the United States are required to pay the U.S. tax rate if they want to bring profits back into the country..."The corporate tax currently is broken," said Mihir Desai, a professor at Harvard Business School and Harvard Law School, whose work was cited (albeit somewhat misinterpreted) by the White House Council of Economic Advisers. "Bringing down the rate and switching the territorial regime so we don't tax corporations on their worldwide income -- both of those are really smart moves."

An op-ed by Mihir Desai. In the annals of U.S. tax overhauls, 1986 is the modern guidepost. That was when a Republican White House joined forces with a divided Congress to modernize and simplify the U.S. tax code, cutting taxes on most Americans and raising them for some powerful interest groups. It was the last piece of tax legislation to deserve the label “reform.” Republicans promised another set of reforms this year, but have pretty much abandoned comprehensive change in favor of tax cuts, mainly for companies and wealthy individuals. Lacking offsetting revenue increases as significant as those of 1986, the proposals are likely to increase U.S. budget deficits and the national debt.

An op-ed by Mihir Desai. Fiercely partisan reactions are overshadowing the accomplishments of the Republican tax proposal – as well as its misguided aspects. In reality, the plan is a mixed bag that has some good, bad and ugly parts.

With the release of an ambitious overhaul of the tax code, House Republicans are moving to fulfill a long-held desire of corporate America: a large and audacious tax cut. Yet economists are divided over whether the plan is likely to revitalize the economy or merely bestow a windfall on the wealthiest investors...Such dismissiveness failed to deter fans of the twin pillars of the House bill: lowering the top nominal tax rate on corporations to 20 percent from 35 percent, and changing the way global profits are taxed. “This will make the United States a better place to invest and a better place to be headquartered in,” said Mihir A. Desai, an economist at Harvard Business School who has at times complained about the White House’s economic claims.

For as much as American politicians and their constituents complain about taxes, the truth is that tax reform packages to address those complaints are rare — the last major reform of the tax code was passed in 1986 under President Ronald Reagan. But starting this week, tax talk is back in vogue in Washington D.C...On a recent and unexpectedly warm day for a New England fall, Harvard Business School Working Knowledge sat down to discuss tax policy in general and reform in particular with HBS Professor Matthew C. Weinzierl and Mihir A. Desai, the Mizuho Financial Group Professor of Finance at HBS and Professor of Law at Harvard Law School, who often testifies before Congress on corporate tax issues.

The White House inflated the potential benefits to workers from a proposed corporate tax cut, according to a Harvard University economist whose work informed the estimate, highlighting a challenge Republicans face as they push a tax rewrite that President Trump has promised will benefit the middle class. Mr. Trump’s Council of Economic Advisers said in a report released on Monday that reducing corporate taxes could raise average household incomes by as much as $9,000 a year. The top end of that estimate was based on work by a trio of researchers, and on Tuesday one of them, Mihir Desai of Harvard, said Mr. Trump’s team had misread the research...Mr. Desai, who wrote the study with Harvard’s C. Fritz Foley and James Hines Jr. of the University of Michigan, said his own estimates of the effect of such a rate cut was closer to $800 a year. “I’m a believer in corporate tax reform, and I’m a believer in corporate tax cuts, and I believe they would go to workers,” he said. “But I don’t believe those numbers add up.”

...It has been a long time coming, but the one or two-year MBA course feels like the Grand Tour of business education in an age of Airbnb. Its graduates are being crowned with powdered wigs just as the digital revolutionaries are sharpening the guillotine...In his new book The Wisdom of Finance, [Mihir Desai] writes about how many of his MBA students avoid risk in order to retain their “optionality”, a concept they had picked up from finance. They “end up,” Prof Desai says, “remaining in companies . . . that were initially intended as way stations that would create more optionality on the path to their actual entrepreneurial, social, or political goals. They often end up saying to themselves, ‘Why not stay another year and create more options for down the road?’ The tool that was supposed to lead to more risk-taking ends up preventing it.”

It’s not often – if ever – you’ll come across a book written by a Harvard finance professor who seems just as comfortable talking about the romantic choices of Pride and Prejudice’s Elizabeth Bennet or the business acumen of Stringer Bell in The Wire, as about economic theory. But, in his new book The Wisdom of Finance, Mihir Desai, a professor at Harvard Business and Harvard Law School, has drawn on the arts to make his case...He had two motivations in writing the book. “One, there is a great deal of misconceptions about finance and then finance gets demonised, and a lot of this happens because people don’t understand finance. And my second motivation is that people in finance . . . we have to rehabilitate finance, and look at what we do with a moral lens.”

From the Great Recession to Libor and PPI, money laundering to mis-sold rate swap deals, the world of finance has, in many cases, earned its crown of thorns. But Mihir Desai, the Mizuho Financial Group professor of finance at Harvard Business School, thinks bankers get a bad rap. I caught up with him on a recent trip to London to discuss his book, the Wisdom of Finance. There is, he says, a deep connection between morality and money. I suggest that given recent years, more than a few will disagree. “Oh of course they will, but that’s what I’m trying to change. In fact part of the idea of the title, the Wisdom of Finance, was to put together two words people don’t usually associate.”

The tax overhaul promised by President Trump and Republican congressional leaders is lugging a remarkably heavy load. The goal is not only to reduce the tax bills of corporations and small businesses, but also to stimulate investment, create jobs, increase global competitiveness and promote economic growth...Mr. Trump and the Republican leadership have pushed to slash the corporate tax rate and switch to what is known as a territorial system that would tax only profits earned in the United States and not those earned in other countries. Mihir Desai, an economist at Harvard Business School, likes that approach. “We currently have the worst of all worlds,” he wrote in an email. “We have a high marginal rate,” which encourages companies to avoid taxes and puts the United States at a global disadvantage.

An op-ed by Mihir Desai. For far too long, U.S. politicians have been promising to bring jobs to Americans. They should instead be encouraging Americans to move to jobs. The absurdity of tax incentives to "create jobs" reached new heights last month with Wisconsin’s deal to lure iPhone assembler Foxconn Technology Group -- which will reportedly cost taxpayers more than $100,000 per job. By promising to bring employment to depressed areas, politicians have convinced Americans that they have a right to a job where they live, and not that they should live where the jobs are. Even though labor-market incentives to relocate have increased over the past 50 years, with growing differences in wages and unemployment around the country, people actually move for work less and less.

Death, taxis and technology: titles in the running for this year’s Financial Times and McKinsey Business Book of the Year give a new twist to the old maxim about certainty. The 17 books on the 2017 longlist include analyses of the implications of world-changing innovations, from the iPhone to drones; a lively account of the rise of Uber; and a sobering history of the role war, plague and catastrophe have played in shaping our economies...The unexpected symbiosis of the apparently separate worlds of the humanities and finance is the subject of another longlisted title, The Wisdom of Finance by Mihir Desai, which uses literature, history, movies and philosophy to shed light on dry financial theories.

Economic and Harvard professor Mihir Desai uses philosophy, film, literature, and history to analyze finance as an institution built on morality and humanity. His book explores how the financial industry can be understood through culture, and how deeply finance impacts our personal lives.

An op-ed by Mihir Desai. While lots of attention is directed toward identifying the next great start-up, the defining tech-industry story of the last decade has been the rise of Apple and Google. In terms of wealth creation, there is no comparison...But the greatest collision between Apple and Google is little noticed. The companies have taken completely different approaches to their shareholders and to the future, one willing to accede to the demands of investors and the other keeping power in the hands of founders and executives.

As an economist, Mihir Desai has gained wide recognition for his expertise in tax policy and international and corporate finance. His writing and teaching have covered such topics as proposed reform of the U.S. tax system and the misuse of high-powered incentives and their impact on American competitiveness. But Desai, Mizuho Financial Group Professor of Finance at Harvard Business School and a professor at Harvard Law School, has set aside his usual academic work in a new book, “The Wisdom of Finance: Discovering Humanity in the World of Risk and Return.”...The Gazette spoke to Desai about the book and the argument he advances in it that finance and the humanities have much to gain from reaffirming and strengthening the connections between them.

An interview with Mihir Desai. Does the world of finance and markets needs a good infusion of humanity? One book examines how how a wider reading of the humanities can help you understand finance and at the same time how finance can help you understand the human condition. It’s by economist and Harvard Business School professor Mihir Desai. He joined Marketplace Morning Report host David Brancaccio to discuss his latest book, "The Wisdom of Finance: Discovering Humanity in the World of Risk and Return."

Why did Wall Street go astray? For most of the last several centuries, bankers and financiers were the pillars of society, the bastions of morality, the people in society that everyone respected. Of course, there was the odd rotten apple in the barrel, but by and large, bankers were trusted and looked up to. Yet over the last few decades, Wall Street has become almost a synonym of evil. What went wrong? What can be done to restore the financial sector to the level of respect that it once enjoyed? This week, I talked about these issues with Harvard Business School finance professor Mihir Desai, on the publication of his intriguing new book, The Wisdom of Finance: Discovering Humanity in the World of Risk and Return (Houghton Mifflin Harcourt, May 2017).

An op-ed by Mihir Desai. The language of finance can be insidious. Words like leverage and concepts like diversification can morph from narrow financial terms into much more general ways of understanding the world. For students that go into finance or business, the idea of “optionality” is particularly pliable—and taken too far, it can be downright dangerous.

An interview with Mihir Desai. People have a bad impression of finance, and that's mostly worrying because its often justified, says Harvard Business School professor Mihir Desai. The sector is in dire need of rehabilitation, and there are several ways it can be done. The first is to realize that turning money into more money is a shortsighted investment. To play the long game, the system needs to focus on and reward value creation, which drives innovation and the economy.

Economic forces and incentives shape not only our lives, but also our fiction – and economists rarely miss a chance to point this out. “Economics spotting” isn’t just a parlor game, however. It can help us remember why we care about economics in the first place. In an era when finance can look like alchemy or worse, its appearance in fiction can remind us that its most fundamental ideas are elegant and essential. There’s a bonus, too: approaching finance this way has the potential to enrich finance itself. “The Wisdom of Finance,” a new book by my Harvard Business School colleague and mentor Mihir A. Desai, traces financial ideas as they turn up in literature (as well as in music, film and theater). Desai’s panorama underscores how finance serves basic human needs – and crops up in unusual places.