AP Source: Obama Seeks 28% Corporate Tax Rate
“WASHINGTON (AP) — President Barack Obama is proposing to cut the corporate tax rate from 35 percent to 28 percent and wants an even lower effective rate for manufacturers, a senior administration official says, as the White House lays down an election-year marker in the debate over tax policy.
In turn, corporations would have to give up dozens of loopholes and subsidies that they now enjoy. Corporations with overseas operations would also face a minimum tax on their foreign earnings.
Treasury Secretary Timothy Geithner on Wednesday was to detail aspects of Obama’s proposed overhaul of the corporate tax system, a plan the president outlined in general terms in his State of the Union speech last month.
Chances of accomplishing such change in the tax system are slim in a year dominated mostly with presidential and congressional elections. But for Obama, the proposal is part of a larger tax plan that is central to his re-election strategy.
The corporate tax plan dovetails with Obama’s call for raising taxes on millionaires and maintaining current rates on individuals making $200,000 or less.
The 35 percent nominal corporate tax rate is the highest in the world after Japan. But deductions, credits and exemptions allow many corporations to pay taxes at a much lower rate.
Under the framework proposed by the administration, the rate cuts, closed loopholes and the minimum tax on overseas earning would result in no increase to the deficit.
That means that many businesses that slip through loopholes or enjoy subsidies and pay an effective tax rate that is substantially less than the 35 percent corporate tax could end up paying more under Obama’s plan. Others, however, would pay less while some would simply benefit from a more simplified system….”
Quality Assurance VP: Citigroup ‘Defrauded’ Fannie and Freddie
“Citigroup Inc. (C), which last week admitted breaking Federal Housing Administration rules and paid a fine, also violated regulations for home loans sold to Fannie Mae (FNM) and Freddie Mac (FRE), according to a whistle-blower’s complaint.
The bank “defrauded, falsified information or misled federal government entities” by selling or securing insurance for mortgages with defects such as improper appraisals and paperwork errors and not reporting them as required, Sherry Hunt, a Citigroup quality-assurance vice president, said in her complaint, which was unsealed yesterday. It was filed under the False Claims Act in federal court in Manhattan in August.
For Citigroup, the third-largest U.S. bank by assets, the high defect rates could be costly. It might be forced to buy back substandard mortgages sold to government-controlled Fannie and Freddie, who buy or guarantee most U.S. mortgages.
Under the Feb. 15 settlement with the U.S. on FHA loans, Citigroup will pay $158.3 million. TheJustice Department reserved the right to pursue criminal and other charges related to mortgages originated or underwritten by Citigroup and not insured by the FHA.
“Everyone is a little bit guilty for not keeping an eye on the processes and doing what we should have been doing,” Hunt said in a phone interview from her home in Silex, Missouri. “Managers have to take ownership of their area, know what’s going on and make sure they’re doing the right thing.”
Comments »Paulson Gets Sued for Sino Forest Investment
Comcast Is Taking on Netflix
U.S. Equity Preview: WYNN, RIG, HPQ, EXPGY, GLW, CORT, CDXS, & AAPL
Apple Inc. (AAPL) : HTC Corp. lost a patent-infringement claim against the world’s largest technology company at the U.S. International Trade Commission, the first of the Taiwanese handset maker’s cases targeting the iPhone.
Codexis Inc. (CDXS) : Alan Shaw resigned as president and chief executive officer of the company, which makes enzymes used in producing drugs. He will continue to serve as an adviser to the board. The board appointed Peter Strumph, business head of pharmaceuticals, as interim CEO.
Corcept Therapeutics Inc. (CORT) : The specialty drug company that hasn’t generated revenue since 2009 won approval for its leading product candidate, a treatment that uses the active ingredient of the abortion pill RU-486 to treat Cushing’s Syndrome.
Corning Inc. (GLW) : The largest maker of glass for flat- panel television sets is poised to rebound to $20 in two to three years as it cuts excess capacity and focuses on the growing smartphone and tablet markets, Barron’s reported in its “The Trader” column, citing Alan Lancz of Alan B. Lancz & Associates.
Experian Plc (EXPGY) : Experian’s U.S.-traded shares are poised to rise 20 percent or more during the next year as the credit-report provider’s expansion in Latin America boosts earnings, Barron’s reported.
Hewlett-Packard Co. (HPQ) : The outlook for the world’s largest personal computer maker is still unclear as Chief Executive Officer Meg Whitman tries to turn it around by changing the corporate culture and boosting research and development expenditure, Barron’s reported.
Transocean Ltd. (RIG) : The world’s biggest operator of offshore drilling rigs said it won’t recommend a dividend payment at its 2012 annual shareholder meeting.
Wynn Resorts Ltd. (WYNN) : Japanese billionaire Kazuo Okada’s Universal Entertainment Corp. (6425 JP) said it will take legal action after Wynn Resorts, a casino operator, forcibly redeemed Universal’s stake at a 31 percent discount and accused Okada of improper payments.
Comments »Gapping Up and Down This Morning
Up
CORT +68.3%, ZNGA +3.3%, CS +3%, MT +2.7%, BBL +2.5%, RIO +2.4%, BHP +2%, TS +1.7%, RBS +1.7%, SLV +1.6%, GOLD +1.4%, NOK +1.3%, VALE +1.1%,
RGEN +6.9%, COG +6.2%, BYD +4.6%, HD +3.4%, SWC +2.4%, M +1.2%, GLNG +0.6%, IRE +4.2%, CS +3%, CS +3%, STD +1.7%, RBS +1.7%, BAC +0.7%,
STP +5.5%, JASO +3.5%, FSLR +1.9%, JKS +1.6%, THLD +28% , STM +7.9%, ZNGA +3.3%, LOW +3.1%, TS +1.7%, NOK +1.3%, FRO +4%, LIFE +1.8%, DANG +1.4% ,
Down
WFT -7.3%, RIG -6.1%, BP -0.6%,
Comments »In Play and On the Wires
New Line Item Accounting Change Would Put $1.5 Trillion Worth of Debt onto the Leasing Industries Balance Sheet…Think GE
Lower Chinese courts strike Apple, iPad
Comments »SHANGHAI (AP) — Apple’s dispute over the iPad trademark deepened Monday after the Chinese company that claims ownership of the name said it won a court ruling against sales of the popular tablet computer in China.
Xie Xianghui, a lawyer for Shenzhen Proview Technology, said the Intermediate People’s Court in Huizhou, a city in southern China’s Guangdong province, had ruled on Friday that distributors should stop selling iPads in China.
The ruling, which was also reported widely in China’s state media, may not have a far-reaching effect. In its battle with Apple, Proview is utilizing lawsuits in several places and also requesting commercial authorities in 40 cities to block iPad sales.
Apple Inc. said in a statement Monday that its case is still pending in mainland China. The company has appealed to Guangdong’s High Court against an earlier ruling in Proview’s favor.
Sheer Indignity: The Shady Business Practices of Citibank
Analysts Forecast $1.2 Billion in Mobil Ads for Facebook
WaMu Exits Bankruptcy
On CDS: Wells Fargo Separates Itself From the Pack
Apple Loses Market Share For a Second Month in China
Gapping Up and Down This Morning
Gapping Up
SPWR +13.6%, AMAT +6%, ACHN +5.5%, GMO +5.5%, CLD +5.2%, BGS +3.6%, BIDU +3.4%, DVA +2.9%, JASO +2.7%, HL +2.6%, ECA +2.6%, TSL +2.5%,
CBEY +2.3%, YGE +2.2%, WWWW +1.9%, LDK +1.8%, SINA +1.2%,
Gapping Down
RMTR -22.5%, QLIK -7.4%, MDRX -5.7%, MXWL -4.9%, FTR -4.7%, PRGN -4.2%, WOOF -3.5%, JWN -2.6%, ROG -2.4%, ARUN -2.3%, RP -2%, ROVI -2%, KEG -1.8%,
Comments »U.S. Equity Preview: ZNGA, WWWW, WOOF, SPWR, JWN, MXWL, LEAP, GILD, BIDU, & AMAT
Applied Materials Inc. (AMAT) rose 5.6 percent to $13.95. The largest producer of chipmaking equipment predicted higher second-quarter profit than analysts had estimated, signaling that semiconductor makers are pulling out of a spending slump.
Baidu Inc. (BIDU) (BIDU US): China’s biggest Internet company by market value said earnings in the fourth quarter were 95 cents a share, excluding some items, beating the average analyst estimate of 90 cents.
Frontier Communications Corp. (FTR) . The phone company serving rural U.S. markets cut its quarterly dividend to 10 cents a share from 18.75 cents.
Gilead Sciences Inc. (GILD) dropped 20 percent to $44. The Foster City, California-based biopharmaceutical company said six out of eight participants in a study using its experimental hepatitis C drug showed “viral relapse” within four weeks after stopping a 12-week treatment plan.
Leap Wireless International Inc. (LEAP) : The pay-as-you- go wireless carrier reported a smaller quarterly loss than analysts predicted as smartphone sales increased and subscribers added the company’s Muve Music streaming service.
Maxwell Technologies Inc. (MXWL) fell 4.9 percent to $20. The maker of electronic components declined as Robert W Baird & Co. shifted the company to “neutral” from “outperform,” based on lower-that-expected fourth quarter revenue.
Nordstrom Inc. (JWN) : The U.S. chain with more than 100 namesake department stores projected full-year earnings that trailed analysts’ estimates amid rising costs.
SunPower Corp. (SPWR) (SPWR US) rose 13 percent to $8.45. The solar panel company majority-owned by Total SA reported better- than-estimated earnings and 2012 sales in line with previous guidance.
VCA Antech Inc. (WOOF) : The largest U.S. operator of veterinary hospitals and clinics reported fourth-quarter profit of 21 cents a share, excluding some items, missing the average analyst estimate of 25 cents.
Web.com Group Inc. (WWWW) : The company that builds websites for small businesses said earnings in the fourth quarter were 28 cents a share, excluding some items, surpassing the average analyst estimate of 26 cents.
Zynga Inc. (ZNGA) (ZNGA US) gained 2.4 percent to $12.34. The online game site that sold shares to the public in December plans to unveil a set of services designed to promote other developers and lessen its dependence on Facebook Inc., two people with knowledge of the matter said.
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