Wednesday, April 18, 2018

Global Debt Hits All-Time High

"At $164 trillion—equivalent to 225 percent of global GDP—global debt continues to hit new record highs almost a decade after the collapse of Lehman Brothers. Compared with the previous peak in 2009, the world is now 12 percent of GDP deeper in debt, reflecting a pickup in both public and nonfinancial private sector debt after a short hiatus (Figure 1.1.1). All income groups have experienced increases in total debt but, by far, emerging market economies are in the lead. Only three countries (China, Japan, United States) account for more than half of global debt (Table 1.1.1)—significantly greater than their share of global output."

Thus notes the IMF in the April 2018 issue of Fiscal Monitor (Chapter 1: "Saving for a Rainy Day," Box 1.1, as usual, citations omitted from the quotation above for readability). Here's the figure and the table mentioned in the quotation.
The figure shows public debt in blue and private debt in red. In some ways, the recent increase doesn't stand out dramatically on the figure. But remember that the vertical axis is being measured as a percentage of the world GDP of about $87 trillion, so the rising percentage represents a considerable sum. 

Here's an edited version of the table, where I cut a column for 2015. The underlying source is the same as the figure above. As noted above, the US, Japan, and China together account for half of  total global debt. 

The rise in debt in China is clearly playing a substantial role here. Explicit central government debt in China is not especially high. But corporate debt in China has risen quickly: as the IMF notes of the period since 2009, "China alone explains almost three-quarters of the increase in global private debt."

In addition, China faces a surge of off-budget borrowing from financing vehicles used by local governments, which often feel themselves under pressure to boost their local economic growth. The IMF explains: 
 "The official debt concept [in China] points to a stable debt profile over the medium term at about 40 percent of GDP. However, a broader concept that includes borrowing by local governments and their financing vehicles (LGFVs) shows debt rising to more than 90 percent of GDP by 2023 primarily driven by rising off-budget borrowing. Rating agencies lowered China’s sovereign credit ratings in 2017, citing concerns with a prolonged period of rapid credit growth and large off-budget spending by LGFVs.
"The Chinese authorities are aware of the fiscal risks implied by rapidly rising off-budget borrowing and undertook reforms to constrain these risks. In 2014, the government recognized as government obligations two-thirds of legacy debt incurred by LGFVs (22 percent of GDP). In 2015, the budget law was revised to officially allow provincial governments to borrow only in the bond market, subject to an annual threshold. Since then, the government has reiterated the ban on off-budget borrowing by local governments, while more strictly regulating the role of the government in public-private partnerships and holding local officials accountable for improper borrowing. Given these measures, the authorities do not consider the LGFV off-budget borrowing as a government obligation under applicable laws.
"There is some uncertainty regarding the degree to which these measures will effectively curb off-budget borrowing. "
An underlying theme of the IMF report is that when an economy is in relatively good times, like the US economy today, it should be figuring out ways to put its borrowing on a downward trend for the next few years. A similar lesson applies to China, where there appears to be some danger that the high levels of borrowing from firms and from local governments are creating future risks.

One old lesson re-learned in the global financial crisis is that high levels of debt can be dangerous. If stock prices rise and then fall, investors will be unhappy that they lost their gains--but for many of them, the gains were only on paper, anyway. But debt is different. If circumstances arises where debts are less likely to be repaid, then financial institutions may well find it hard to raise capital, and will be pressured to cut back on lending. If borrowing was helping to hold asset prices high (including housing, land, or stocks), then a decline in borrowing can cause those asset prices to drop. Lower asset prices make it harder to repay borrowed money, tightening the financial crunch, and slowing an economy further. 

When global debt as a share of GDP is hitting an all-time high, it's worth paying attention to the risks involved.

Tuesday, April 17, 2018

Some Economics for Tax Filing Day

U.S. tax returns and taxes owed for 2017 are due today, April 17. To commemorate, I offer some connections to five posts about federal income taxes from the last few years. Click on the links if you'd like additional discussion and sources for of any of these topics.

1) Should Individual Income Tax Returns be Public Information? (March 30, 2015)
"My guess is that if you asked Americans if their income taxes should be public information, the answers would mostly run the spectrum from "absolutely not" to "hell, no." But the idea that tax returns should be confidential and not subject to disclosure was not a specific part of US law until 1976. At earlier periods of US history, tax returns were sometimes published in newspapers or posted in public places. Today, Sweden, Finland, Iceland and Norway have at least some disclosure of tax returns--and since 2001 in Norway, you can obtain information on income and taxes paid through public records available online."

2) How much does the federal tax code reduce income inequality, in comparison with  social insurance spending and means-tested transfers? 

"The Distribution and Redistribution of US Income" (March 20, 2018) is based on a report from the Congressional Budget Office, "The Distribution of Household Income, 2014" (March 2018).



From the post: "The vertical axis of the figure is a Gini coefficient, which is a common way of summarizing the extent of inequality in a single number. A coefficient of 1 would mean that one person owned everything. A coefficient of zero would mean complete equality of incomes.

"In this figure, the top line shows the Gini coefficient based on market income, rising over time.

"The green line shows the Gini coefficient when social insurance benefits are included: Social Security, the value of Medicare benefits, unemployment insurance, and worker's compensation. Inequality is lower with such benefits taken into account, but still rising. It's worth remembering that almost all of this change is due to Social Security and Medicare, which is to say that it is a reduction in inequality because of benefits aimed at the elderly.

"The dashed line then adds a reduction in inequality due to means-tested transfers. As the report notes, the largest of these programs are "Medicaid and the Children’s Health Insurance Program (measured as the average cost to the government of providing those benefits); the Supplemental Nutrition Assistance Program (formerly known as the Food Stamp program); and Supplemental Security Income." What many people think of as "welfare," which used to be called Aid to Families with Dependent Children (AFDC) but for some years now has been called Temporary Assistance to Needy Families (TANF), is included here, but it's smaller than the programs just named.

"Finally, the bottom purple line also includes the reduction in inequality due to federal taxes, which here includes not just income taxes, but also payroll taxes, corporate taxes, and excise taxes."

3) "How Raising the Top Tax Rate Won't Much Alter Inequality" (October 23, 2015)

"Would a significant increase in the top income tax rate substantially alter income inequality?" William G. Gale, Melissa S. Kearney, and Peter R. Orszag ask the question in a very short paper of this title published by the Economic Studies Group at the Brookings Institution. Their perhaps surprising answer is "no."

The Gale, Kearney, Orszag paper is really just a set of illustrative calculations, based on the well-respected microsimulation model of the tax code used by the Tax Policy Center. Here's one of the calculations. Say that we raised the top income tax bracket (that is, the statutory income tax rate paid on a marginal dollar of income earned by those at the highest levels of income) from the current level of 39.6% up to 50%. Such a tax increase also looks substantial when expressed in absoluted dollars. By their calculations, "A larger hike in the top income tax rate to 50 percent would result, not surprisingly, in larger tax increases for the highest income households: an additional $6,464, on average, for households in the 95-99th percentiles of income and an additional $110,968, on average, for households in the top 1 percent. Households in the top 0.1 percent would experience an average income tax increase of $568,617."

In political terms, at least, this would be a very large boost. How much would it affect inequality of incomes? To answer this question, we need a shorthand way to measure inequality, and a standard tool for this purpose is the Gini coefficient. This measure runs from 0 in an economy where all incomes are equal to 1 in an economy where one person receives all income (a more detailed explanation is available here). For some context, the US distribution of income based on pre-tax income is .610. After current tax rates are applied, the after-tax distribution of income is .575.

If the top tax bracket rose to 50%, then according to the first round of Gale, Kearney, Orszag calculations, the Gini coefficient for after-tax income barely fall, dropping to .571. For comparison, the Gini coefficient for inequality of earnings back in 1979, before inequality had started rising, was .435. ... 

Raising the top income tax rate to 50% brings in less than $100 billion per year. Total federal spending in 2015 seems likely to run around $3.8 trillion. So it would be fair to say that raising the top income tax rate to 50% might increase total federal revenues by about 2%.

4) The top marginal income tax rates used to be a lot higher, but what share of taxpayers actually faced those high rates,, and much revenue did those higher rates actually collect?

Compare "Top Marginal Tax Rates: 1958 vs. 2009" (March 16, 2012), which is based on a short report by Daniel Baneman and Jim Nunns,"Income Tax Paid at Each Tax Rate, 1958-2009," published by the Tax Policy Center. The top statutory tax rate in 2009 was 35%; back in 1958, it was about 90%. What share of taxpayer returns paid these high rates? Across this time period, roughly 20% of all tax returns owed no tax, and so faced a marginal tax rate of zero percent. Back in 1958, the most common marginal tax brackets faced by taxpayers were in the 16-28% category; since the mid-1980s, the most common marginal tax rate faced by taxpayers has been the 1-16% category. Clearly, a very small proportion of taxpayers actually faced the very highest marginal tax rates.



How much revenue was raised by the highest marginal tax rates? Although the highest marginal tax rates applied to a tiny share of taxpayers, marginal tax rates above 39.7% collected more than 10% of income tax revenue back in the late 1950s. It's interesting to note that the share of income tax revenue collected by those in the top brackets for 2009--that is, the 29-35% category, is larger than the rate collected by all marginal tax brackets above 29% back in the 1960s.



5) Did you know "How Milton Friedman Helped to Invent Tax Withholding" (April 12, 2014)?

The great economist Milton Friedman--known for his pro-market, limited government views--helped to invent government withholding of income tax. It happened early in his career, when he was working for the U.S. government during World War II, and the top priority was to raise government revenues to support the war effort. Of course, the IRS opposed the idea at the time as impractical.

Monday, April 16, 2018

The Share of Itemizers and the Politics of Tax Reform

Those who fill out a US tax return always face a choice. On one hand, there is a "standard deduction," which is the amount you deduce from your income before calculating your taxes owed on the rest. On the other hand, there are a group of individual tax deductions: for mortgage interest, state and local taxes, high medical expenses, charitable contributions, and others. If the sum of all these deductions is larger than the standard deduction, then a taxpayer will "itemize" deductions--that is, filling out additional tax forms that list all the deductions individually. Conversely, if the standard deduction is larger than the sum of all the individual deductions is not larger than the list of itemized deductions, then the taxpayer just uses the standard deduction, and doesn't go through the time and bother of itemizing.

In the last 20 years or so, typically about 30-35% of federal tax returns found it worthwhile to itemize deductions.
But the Tax Cuts and Jobs Act passed into law and signed by President Trump in December 2017 will change this pattern substantially. The standard deduction increases substantially, while limits or caps are imposed on some prominent deductions. As a result, the number of taxpayers who will find it worthwhile to itemize will drop substantially.

Simulations from the Tax Policy Center, for example, suggest that the total number of itemizers will fall by almost 60%, from 46 million to 19 million -- which means that in next year's taxes, maybe only about 11% of all returns will find it worthwhile to itemize.

Set aside all the arguments over pros and cons and distributional effects of the changes in the standard deduction and the individual deductions, and focus on the political issue. It seems to me that this dramatic fall in the number of taxpayers, especially if it is sustained for a few years, will realign the political arguments over future tax reform. If one-third or so of taxpayers are itemizing--and those who itemize are typically those with high incomes and high deductions who make a lot of noise--then reducing deductions will be politically tough. But if only one-ninth of taxpayers are itemizing, while eight-ninths are just taking the standard deduction, then future reductions in the value of tax deductions may be easier to carry out. It will be interesting to see if the political dynamics of tax reform shift along these lines in the next few years.

When Britain Repealed Its Income Tax in 1816

Great Britain first had an income tax in 1799, but then abolished it in 1816. In honor of US federal tax returns being due tomorrow, April 17, here's a quick synopsis of the story.

Great Britain was in an on-and-off war with France for much of the 1790s. The British government borrowed heavily and was short of funds. When Napoleon came to power in 1799, the government under Prime Minister William Pitt introduced a temporary income tax. Here's a description from the website of the British National Archives:
‘Certain duties upon income’ as outlined in the Act of 1799 were to be the (temporary) solution. It was a tax to beat Napoleon. Income tax was to be applied in Great Britain (but not Ireland) at a rate of 10% on the total income of the taxpayer from all sources above £60, with reductions on income up to £200. It was to be paid in six equal instalments from June 1799, with an expected return of £10 million in its first year. It actually realised less than £6 million, but the money was vital and a precedent had been set.
In 1802 Pitt resigned as Prime Minister over the question of the emancipation of Irish catholics, and was replaced by Henry Addington. A short-lived peace treaty with Napoleon allowed Addington to repeal income tax. However, renewed fighting led to Addington’s 1803 Act which set the pattern for income tax today. ...

Addington’s Act for a ‘contribution of the profits arising from property, professions, trades and offices’ (the words ‘income tax’ were deliberately avoided) introduced two significant changes:
  • Taxation at source - the Bank of England deducting income tax when paying interest to holders of gilts, for example
  • The division of income taxes into five ‘Schedules’ - A (income from land and buildings), B (farming profits), C (public annuities), D (self-employment and other items not covered by A, B, C or E) and E (salaries, annuities and pensions).
 Although Addington’s rate of tax was half that of Pitt’s, the changes ensured that revenue to the Exchequer rose by half and the number of taxpayers doubled. In 1806 the rate returned to the original 10%.
Pitt in opposition had argued against Addington’s innovations: he adopted them almost unchanged, however, on his return to office in 1805. Income tax changed little under various Chancellors, contributing to the war effort up to the Battle of Waterloo in 1815.
Perhaps unsurprisingly, Britain's government was not enthusiastic about repealing the income tax even after the defeat of Napoleon. But there was an uprising of taxpayers. The website of the UK Parliament described it this way:
"The centrepiece of the campaign was a petition from the City of London Corporation. In a piece of parliamentary theatre, the Sheriffs of London exercised their privilege to present the petition from the City of London Corporation in person. They entered the Commons chamber wearing their official robes holding the petition.
"The petition reflected the broad nature of the opposition to renewing the tax. Radicals had long complained that ordinary Britons (represented by John Bull in caricatures) had borne the brunt of wartime taxation. Radicals argued that the taxes were used to fund 'Old Corruption', the parasitic network of state officials who exploited an unrepresentative political system for their own interests.
"However, the petitions in 1816 came from very different groups, including farmers, businessmen and landowners, who were difficult for the government to dismiss. Petitioners, such as Durham farmers, claimed they had patriotically paid the tax during wartime with 'patience and cheerfulness', distancing themselves from radical critics of the government.
"In barely six weeks, 379 petitions against renewing the tax were sent to the House of Commons. MPs took the opportunity when presenting these petitions, to highlight the unpopularity of the tax with their constituents and the wider public. ... Ministers were accused of breaking the promise made in 1799 when the tax was introduced as a temporary, wartime measure and not as a permanent tax. The depressed state of industry and agriculture was blamed on heavy taxation.
"The tax was also presented as a foreign and un-British measure that allowed the state to snoop into people's finances. As the City of London petition complained, it was an 'odious, arbitrary, and detestable inquisition into the most private concerns and circumstances of individuals'."
Also unsurprisingly, the repeal of the income tax led the British government to raise other taxes instead. The BBC writes: Forced to make up the shortfall in revenue, the Government increased indirect taxes, many of which, for example taxes on tea, tobacco, sugar and beer, were paid by the poor. Between 1811 and 1815 direct taxes - land tax, income tax, all assessed taxes - made up 29% of all government revenue. Between 1831 and 1835 it was just 10%."

There's a story that when Britain repealed its income tax in 1816, Parliament ordered that the records of tax be destroyed, so posterity would never learn about it and be tempted to try again. The BBC reports:
"Income tax records were then supposedly incinerated in the Old Palace Yard at Westminster. Whether this bonfire really took place we can't say. Several historians who have studied the period refer to the event as a story or legend that may have been true. Perhaps the most convincing evidence are reports that, in 1842, when Peel re-introduced income tax, albeit in a less contentious form, the records were no longer available. Another story is that those burning the records were unaware of the fact that duplicates had been sent for safe-keeping to the King's Remembrancer. They were then put into sacks and eventually surfaced in the Public Records Office."

Friday, April 13, 2018

The Global Rise of Internet Access and Digital Government

What happens if you mix government and the digital revolution? The answer is Chapter 2 of the April 2018 IMF publication Fiscal Monitor, called "Digital Government." The report offers some striking insights about access to digital technology in the global economy and how government may use this technology.

Access to digital services is rising fast in developing countries, especially in the form of mobile phones, which appears to be on its way to outstripping access to water, electricity, and secondary schools.

Of course, there are substantial portions of the world population not connected as yet, especially in Asia and Africa.
The focus of the IMF chapter is on how digital access might improve the basic functions of government taxes and spending. On the tax side, for example, taxes levied at the border on international trade, or value-added taxes, can function much more simply as records become digitized. Income taxes can be submitted electronically. The government can use electronic records to search for evidence of tax evasion and fraud.

On the spending side, many developing countries experience a situation in which those with the lowest income levels don't receive government benefits to which they are entitled by law, either because they are disconnected from the government or because there is a "leakage" of government spending to others.  The report cites evidence along these lines:
"[D]igitalizing government payments in developing countries could save roughly 1 percent of GDP, or about $220 billion to $320 billion in value each year. This is equivalent to 1.5 percent of the value of all government payment transactions. Of this total, roughly half would accrue directly to governments and help improve fiscal balances, reduce debt, or finance priority expenditures, and the remainder would benefit individuals and firms as government spending would reach its intended targets (Figure 2.3.1). These estimates may underestimate the value of going from cash to digital because they exclude potentially significant benefits from improvements in public service delivery, including more widespread use of digital finance in the private sector and the reduction of the informal sector."
I'll also add that the IMF is focused on potential gains from digitalization, which is  fair enough. But this chapter doesn't have much to say about potential dangers of overregulation, over-intervention, over-taxation, and even outright confiscation that can arise when certain governments gain extremely detailed access to information on sales and transactions. 

Thursday, April 12, 2018

State and Local Spending on Higher Education

"Everyone" knows that the future of the US economy depends on a well-educated workforce, and on a growing share of students achieving higher levels of education. But state spending patterns on higher education aren't backing up this belief. Here are some figures from the SHEF 2017: State Higher Education Finance report published last month by the State Higher Education Executive Officers Association.

The bars in this figure shows per-student sending on pubic higher education by state and local government from all sources of funding, with the lower blue part of the bar showing government spending and the upper green part of the bar showing spending based on tuition revenue from students. The red line shows enrollments in public colleges, which have gone flat or even declined a little since the Great Recession.

This figure clarifies a pattern that is apparent from the green bars in the above figure: the share of spending on public higher education that comes from tuition has been rising. It was around 29-31% of total spending in the 1990s, up to about 35-36% in the middle of the first decade of the 2000s, and in recent years has been pushing 46-47%. That's a big shift in a couple of decades.
The reliance on tuition for state public education varies wildly across states, with less than 15% of total spending on public higher ed coming from tuition in Wyoming and California, and 70% or more of total spending on public higher education coming from tuition in Michigan, Colorado, Pennsylvania, Delaware, New Hampshire, and Vermont.

There are lots of issues in play here: competing priorities for state and local spending, rising costs of higher education, the returns from higher education that encourage students (and their families) to pay for it, and so on. For the moment, I'll just say that it doesn't seem like a coincidence that the tuition share of public higher education costs is rising at the same time that enrollment levels are flat or declining. 

Wednesday, April 11, 2018

US Mergers and Antitrust in 2017

Each year the Federal Trade Commission and and the Department of Justice Antitrust Division publish the Hart-Scott-Rodino Annual Report, which offers an overview of merger and acquisition activity and antitrust enforcement during the previous year. The Hart-Scott-Rodino legislation requires that all mergers and acquisitions above a certain size--now set at $80.8 million--be reported to the antitrust authorities before they occur. The report thus offers an overview of recent merger and antitrust activity in the United States.

For example, here's a figure showing the total number of mergers and acquisitions reported. The total has been generally rising since the end of the Great Recession in 2009, but there was a substantial from 1832 transactions in 2016 to 2052 transactions in 2017.  Just before the Great Recession, the number of merger transactions peaked at 2,201, so the current level is high but not unprecedented.

The report also provides a breakdown on the size of mergers. Here's what it looked like in 2017. As the figure shows, there were 255 mergers and acquisitions of more than $1 billion. 

After a proposed merger is reported, the FTC or the US Department of Justice can request a "second notice" if it perceives that the merger might raise some anticompetitive issues. In the last few years, about 3-4% of the reported mergers get this "second request." 

This percentage may seem low, but it's not clear what level is appropriate.. After all, the US government isn't second-guessing whether mergers and acquisitions make sense from a business point of view. It's only asking whether the merger might reduce competition in a substantial way. If two companies that aren't directly competing with other combine, or if two companies combine in a market with a number of other competitors, the merger/acquisition may turn out well or poorly from a business point of view, but it is less likely to raise competition issues.

Teachers of economics may find the report a useful place to come up with some recent examples of antitrust cases, and there are also links to some of the underlying case documents and analysis (which students can be assigned to read). Here are a few examples from 2017 cases of the Antitrust Division at the US Department of Justice and the Federal Trade Commission. In the first one, a merger was blocked because it would have reduced competition for disposal of low-level radioactive waste.   In the second, a merger between two sets of movie theater chains was allowed only a number of conditions were met aimed at preserving competition in local markets. The third case involved a proposed merger between the two largest providers daily paid fantasy sports contests, and the two firms decided to drop the merger after it was challenged.
In United States v. Energy Solutions, Inc., Rockwell Holdco, Inc., Andrews County Holdings, Inc. and Waste Control Specialists, LLC, the Division filed suit to enjoin Energy Solutions, Inc. (ES), a wholly-owned subsidiary of Rockwell Holdco, Inc., from acquiring Waste Control Specialists LLC (WCS), a wholly-owned subsidiary of Andrews County Holdings, Inc. The complaint alleged that the transaction would have combined the only two licensed commercial low-level radioactive waste (LLRW) disposal facilities for 36 states, Puerto Rico and the District of Columbia. There are only four licensed LLRW disposal facilities in the United States. Two of these facilities, however, did not accept LLRW from the relevant states. The complaint alleged that ES’s Clive facility in Utah and WCS’s Andrews facility in Texas were the only two significant disposal alternatives available in the relevant states for the commercial disposal of higher-activity and lower-activity LLRW. At trial, one of the defenses asserted by the defendants was that that WCS was a failing firm and, absent the transaction, its assets would imminently exit the market. The Division argued that the defendants did not show that WCS’s assets would in fact imminently exit the market given its failure to make good-faith efforts to elicit reasonable alternative offers that might be less anticompetitive than its transaction with ES. On June 21, 2017, after a 10-day trial, the U.S. District Court for the District of Delaware ruled in favor of the Division. ...

In United States v. AMC Entertainment Holdings, Inc. and Carmike Cinemas, Inc., the Division challenged AMC Entertainment Holdings, Inc.’s proposed acquisition of CarmikeCinemas, Inc. AMC and Carmike were the second-largest and fourth-largest movie theatre chains, respectively, in the United States. Additionally, AMC owned significant equity in National CineMedia, LLC (NCM) and Carmike owned significant equity in SV Holdco, LLC, a holding company that owns and operates Screenvision Exhibition, Inc. NCM and Screenvision are the country’s predominant preshow cinema advertising networks, covering over 80 percent of movie theatre screens in the United States. The complaint alleged that the proposed acquisition would have provided AMC with direct control of one of its most significant movie theatre competitors, and in some cases, its only competitor, in 15 local markets in nine states. As a result, moviegoers likely would have experienced higher ticket and concession prices and lower quality services in these local markets. The complaint further alleged that the acquisition would have allowed AMC to hold sizable interests in both NCM and Screenvision post-transaction, resulting in increased prices and reduced services for advertisers and theatre exhibitors seeking preshow services. On December 20, 2016, a proposed final judgment was filed simultaneously with the complaint settling the lawsuit. Under the terms of the decree, AMC agreed to (1) divest theatres in the 15 local markets; (2) reduce its equity stake in NCM to 4.99 percent; (3) relinquish its seats on NCM’s Board of Directors and all of its other governance rights in NCM; (4)transfer 24 theatres with a total of 384 screens to the Screenvision cinema advertising network; and (5) implement and maintain “firewalls” to inhibit the flow of competitively sensitive information between NCM and Screenvision. The court entered the final judgment on March 7, 2017. ...

In DraftKings/FanDuel, the Commission filed an administrative complaint challenging the merger of DraftKings and FanDuel, two providers of paid daily fantasy sports contests. The Commission's complaint alleged that the transaction would be anticompetitive because the merger would have combined the two largest daily fantasy sports websites, which controlled more than 90 percent of the U.S. market for paid daily fantasy sports contests. The Commission alleged that consumers of paid daily fantasy sports were unlikely to view season-long fantasy sports contests as a meaningful substitute for paid daily fantasy sports, due to the length of season-long contests, the limitations on number of entrants, and several other issues. Shortly after the Commission filed its complaint, the parties abandoned the merger on July 13, 2017, and the Commission dismissed its administrative complaint.