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Tag >> Congress
Dec 25

Who says President Obama is anti-business?

Posted by Stephen Taub in tax credit, TaxCongressCash

Stephen Taub

The recently signed tax compromise bill-also unofficially known as Stimulus II-not only contains a two-year extension of the Bush tax cuts for everyone, including those who don't want it except for the politicians who obsessively pushed for it. It also included about 50 or so tax breaks for businesses.

I already detailed the bonus depreciation and R&D tax credit.

Aug 05

Health reform challenges create uncertainty for employers

Posted by Jeremy Smerd in lawsuitshealth care reformCongress

Jeremy Smerd

Employers may not like the uncertainty that the new health reform law has injected into their health care benefits plans, but they are not giving up on providing health care, as I wrote earlier this week. After years of wrangling, a bill passed. The law is on the books and employers are adjusting to a new reality.

Still, the effort to knock down health reform continues. This would seem to add more uncertainty into the plans of employers, who love nothing more than a fixed cost.

Jul 27

Proposed legislation would extend 15-year depreciation

Posted by Karen1 in leasingdepreciationCongress


While it hasn't received much attention, a bill introduced by Senator Kent Conrad (D-ND) in June could help many companies come tax time. The bill, S.3510, would permanently extend the 15-year recovery period for qualified leasehold improvement property, as well as qualified restaurant and retail properties. The bill has seven co-sponsors, including five Republicans. It mirrors a bill introduced in the House (H.R. 4306) in late December, by Rep. Kendrick Meek, a Democrat from Florida. MeekÕs bill attracted 45 co-sponsors, also from both sides of the aisle.

Prior to 2004, most buildings and building improvements followed a 39-year depreciation schedule, says George Manousos, a partner in the Washington office of Pricewaterhouse Coopers. That changed with the passage of the American Jobs Creation Act of 2004, which permitted a 15-year depreciation schedule. Businesspeople had argued that because of wear and tear and changing trends, these improvements didn't last anywhere near 39 years. In addition, the accelerated schedule boosted companies's depreciation expense, which is non-cash, reducing their taxable income.

Jul 27

Time to reread Keynes

Posted by Ron F in recoveryrecessionObama Administrationjobsjoblessnessinvestmentfinancial crisisenvironmental policyenergyemploymenteconomydemandCongressCareers/Management

Ron F

I've avoided rehearsing the on-going debate over the bleak macroeconomic picture, because it quickly descends into endless political back and forth along with the usual name-calling, as my colleague Steve Taub and I have been discussing internally today.  But it's time to make an exception:

Is the private sector not hiring because it fears more aggressive action from the public sector, and so the public sector (read Obama administration) should leave the economy to itself, as those on the right claim? Or is the lack of private sector hiring a reflection of a lack of private sector hiring, and thus a vicious circle and market failure that requires the public sector (read Obama administration) to step in with a serious jobs program involving infrastructure, alternative energy and schools, as those on the left insist?

Not to speak for Steve, but my sense is he tends to agree with the first perspective, at least for the most part, and I can safely report that I agree with the second, and would recommend James Surowiecki's recent column to help make my case if I could find it. Since I can't, suffice it to say Surowiecki made the useful observation that the two sectors where hiring is picking up, banking and health care, are those where the government has taken the most aggressive regulatory action.

Jul 07

The financial crisis is only "on pause"

Posted by Ron F in Volcker RuleRiskRegulationObama Administrationfinancial market reformfinancial crisisCongresscomplianceBanksbanking reformBankingbailouts

Ron F

There's some additional recent work out there that's worth citing in connection with Karen's post on Tuesday.

In particular, I would point readers to the piece posted Monday on by Enrico Perotti, a finance professor at the Amsterdam Business School. Essentially, Perotti's piece explains why Kotlikoff's prescription is necessary. As it did the US Congress, the banking industry has fought off international attempts to get the so-called Basel Committee to force the industry to de-leverage its business model. And Kotlikoff's idea does exactly that, simply because mutual funds are financed entirely by equity.

Jul 06

GAO to audit GASB

Posted by Going Concern in RegulationGAAPCongresscomplianceauditorsauditingaccrual methodAccountingaccountants

Going Concern

Submitted by Adrienne Gonzalez, republished from Going Concern, Accounting News for Accountants and CFOs.

If we still care about financial reform, we should especially care about proposed changes to the Government Accounting Standards Board because, let's face it, government accounting could really use a helping hand. Were government pensions forced to use the same reporting rules as every other pension, a $3 trillion hole would open up and we would see immediately that rules in desperate need of repair have remained broken because the current system allows the truth to be buried in the footnotes.

Jul 01

AIG vs. Goldman reveals the flaw in financial reform

Posted by Ron F in RiskRegulationGoldman SachsGAAPfinancial reform billfinancial market reformfinancial crisisFASBderivativescredit default swapsCongresscomplianceBanksbanking reformBankingbank failuresbailoutAIGAccounting

Ron F

The latest revelations  concerning the dispute between AIG and Goldman over collateral show how weak the new financial reform package really is.

After all, Goldman's demands for collateral from AIG as it was failing ended up costing taxpayers billions of dollars. Yet according to the testimony today during the crisis panel's latest hearings, the whole question hinged on what constituted fair value.

Jul 01

Companies sitting on still more cash

Posted by Ron F in TaxTARPrecoveryrecessioneconomydemanddefaultconsumer spendingCongress, cash management, cash concernsCashCarmen ReinhartCareers/Managementcapital expenditurescapexBanks

Ron F

A survey released today by the Association of Financial Professionals will do nothing to dampen the austerity versus stimulus debate.

To wit: Forty-three percent of US corporations had larger US cash and short-term investment holdings this May than they did six months earlier. Only 24 percent of respondents reported that their short-term holdings had shrunk during the past six months.

Jun 28

Financial reform bill far from toothless

Posted by Ron F in Volcker RuleRiskPaul Volckerfinancial crisisderivativescredit default swapsCongresscomplianceCDSBanksbanking reformBankingbank failures

Ron F

While many critics claim the financial regulation bill that emerged from Congressional negotiations on Friday will do next to nothing to reduce the chances of another banking crisis, there are some limits on risk taking that could do just that.

The one that strikes me as the toughest and most critical is the so-called Lincoln amendment, which would require banks to separately capitalize their trading in credit default swaps, which were central to the recent crisis.

Jun 14

How bad a hit to GDP from financial reform?

Posted by Ron F in SifmaRiskRegulationrecoveryrecessionMorgan Stanleyloans, J.P. Morgan Chase, financial reformfinancial crisisFederal ReserveFedeconomyCongresscomplianceBanksbanking reformBankingbank lendingbank failures

Ron F

A panel sponsored by the Securities Industry and Financial Markets Association on Monday on what banks can expect from financial reform warned that higher capital reserves and other limits Congress imposes on their profitability would hurt the economy as they curbed their ability to lend.

Several panelists, including Adam Gilbert, head of regulatory policy in the corporate risk management group of JP Morgan Chase, and Gary Mandelblatt, chief risk officer of Nomura, warned repeatedly of such "unintended consequences" from financial reform.

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