The rise of MLPs
“Time and time again, the imposition of new burdens on businesses distorts the flow of money.” The Economist magazine states the obvious in its current edition.
The reference is to the latest tactic corporate America is embracing to counter the actions of financial regulators to rein in, in the name of “fair play,” those it says have unfairly employed capitalism's “excesses.” But, as the magazine notes, such regulations have led to this perversity — “rules to protect investors encourage firms not to grow,” which serves neither, nor the economy at large.
That additional red tape and high taxes have led to the rise of master limited partnerships, or MLPs, which The Economist defines as a combination of “the limited liability of a corporation, the tax advantages of a partnership and the governance of a private firm.”
MLPs don't pay corporate taxes as long as profits are passed back to investors each year. Proponents tout it as a way to raise capital quickly, serve as a credit alternative to those bypassed by banks, and, by their very nature, force capital to flow rather than be hoarded.
Critics argue that MLPs are yet another monster of the special interests that cater to special interests and at the expense of transparency and, thus, pervert public markets, if not the spirit of capitalism itself.
Of course, as The Economist reminds, there is that time-honored better solution — leveling the playing field by reducing the onerous regulations and high corporate tax rates that created the climate for MLPs in the first place.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Pittsburgh Laurels & Lances
- Greensburg Laurels & Lances
- Alle-Kiski Laurels & Lances
- Corbett & taxes: Cue the tap dance
- The Thursday wrap
- Recasting the EPA: Devolving power to the states
- James Foley, 1973-2014: Fighting on