Business & Economy
SEC-Citigroup settlement rejected, judge is right to seek information PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Tuesday, 06 December 2011 13:10
Monday, Nov. 28, 2011

Sen. Chuck Grassley of Iowa today made the following comment on a judge’s rejection of the Securities and Exchange Commission’s settlement with Citigroup.  Grassley works to gauge the agency’s performance on behalf of the investing public.

“Judge Rakoff is right to ask for information.  The SEC needs to provide a clear rationale for the enforcement penalties in this case and in others.  Otherwise, the public is in the dark about whether the settlements are adequate and the court’s role is reduced to a rubber stamp.   A settle and slap-on-the-wrist approach has not and will not deter the defrauding of investors.”

 
Harkin, DeFazio Wall Street Trading and Speculators Tax Cited in Krugman Column on Ways to Reduce the Deficit PDF Print E-mail
News Releases - Business & Economy
Written by Sen. Tom Harkin   
Tuesday, 06 December 2011 12:58

MEMO

To: Financial Writers
From: Kate Cyrul for Senator Tom Harkin (D-IA); Jen Gilbreath for Congressman DeFazio (D-OR)
Re: Harkin, DeFazio Wall Street Trading and Speculators Tax Cited in Krugman Column on Ways to Reduce the Deficit
Date: Monday, November 28, 2011

In case you missed it, Senator Harkin and Congressman DeFazio’s Wall Street Trading and Speculators Tax was cited in today’s column by Paul Krugman entitled “Things to Tax.”  Analysis conducted by the Joint Committee on Taxation found that the Wall Street Trading and Speculators Tax Act will raise $352 billion over the time period of January 2013 through 2021.  The Joint Tax Committee also estimated that the Act raises $218.6 billion in the last 5 years, on average over $43 billion per year.

For more information, please contact Kate Cyrul at (202) 224-3254 or visit http://harkin.senate.gov/ or Jen Gilbreath at (202) 731-0063 or visit http://www.defazio.house.gov/.

The New York Times

The Opinion Pages

 

November 28, 2011

Things to Tax

By PAUL KRUGMAN

The supercommittee was a superdud — and we should be glad. Nonetheless, at some point we’ll have to rein in budget deficits. And when we do, here’s a thought: How about making increased revenue an important part of the deal?

And I don’t just mean a return to Clinton-era tax rates. Why should 1990s taxes be considered the outer limit of revenue collection? Think about it: The long-run budget outlook has darkened, which means that some hard choices must be made. Why should those choices only involve spending cuts? Why not also push some taxes above their levels in the 1990s?

Let me suggest two areas in which it would make a lot of sense to raise taxes in earnest, not just return them to pre-Bush levels: taxes on very high incomes and taxes on financial transactions.

About those high incomes: In my last column I suggested that the very rich, who have had huge income gains over the last 30 years, should pay more in taxes. I got many responses from readers, with a common theme being that this was silly, that even confiscatory taxes on the wealthy couldn’t possibly raise enough money to matter.

Folks, you’re living in the past. Once upon a time America was a middle-class nation, in which the super-elite’s income was no big deal. But that was another country.

The I.R.S. reports that in 2007, that is, before the economic crisis, the top 0.1 percent of taxpayers — roughly speaking, people with annual incomes over $2 million — had a combined income of more than a trillion dollars. That’s a lot of money, and it wouldn’t be hard to devise taxes that would raise a significant amount of revenue from those super-high-income individuals.

For example, a recent report by the nonpartisan Tax Policy Center points out that before 1980 very-high-income individuals fell into tax brackets well above the 35 percent top rate that applies today. According to the center’s analysis, restoring those high-income brackets would have raised $78 billion in 2007, or more than half a percent of G.D.P. I’ve extrapolated that number using Congressional Budget Office projections, and what I get for the next decade is that high-income taxation could shave more than $1 trillion off the deficit.

It’s instructive to compare that estimate with the savings from the kinds of proposals that are actually circulating in Washington these days. Consider, for example, proposals to raise the age of Medicare eligibility to 67, dealing a major blow to millions of Americans. How much money would that save?

Well, none from the point of view of the nation as a whole, since we would be pushing seniors out of Medicare and into private insurance, which has substantially higher costs. True, it would reduce federal spending — but not by much. The budget office estimates that outlays would fall by only $125 billion over the next decade, as the age increase phased in. And even when fully phased in, this partial dismantling of Medicare would reduce the deficit only about a third as much as could be achieved with higher taxes on the very rich.

So raising taxes on the very rich could make a serious contribution to deficit reduction. Don’t believe anyone who claims otherwise.

And then there’s the idea of taxing financial transactions, which have exploded in recent decades. The economic value of all this trading is dubious at best. In fact, there’s considerable evidence suggesting that too much trading is going on. Still, nobody is proposing a punitive tax. On the table, instead, are proposals like the one recently made by Senator Tom Harkin and Representative Peter DeFazio for a tiny fee on financial transactions.

And here’s the thing: Because there are so many transactions, such a fee could yield several hundred billion dollars in revenue over the next decade. Again, this compares favorably with the savings from many of the harsh spending cuts being proposed in the name of fiscal responsibility.

But wouldn’t such a tax hurt economic growth? As I said, the evidence suggests not — if anything, it suggests that to the extent that taxing financial transactions reduces the volume of wheeling and dealing, that would be a good thing.

And it’s instructive, too, to note that some countries already have financial transactions taxes — and that among those who do are Hong Kong and Singapore. If some conservative starts claiming that such taxes are an unwarranted government intrusion, you might want to ask him why such taxes are imposed by the two countries that score highest on the Heritage Foundation’s Index of Economic Freedom.

Now, the tax ideas I’ve just mentioned wouldn’t be enough, by themselves, to fix our deficit. But the same is true of proposals for spending cuts. The point I’m making here isn’t that taxes are all we need; it is that they could and should be a significant part of the solution.


 
New Study on Impediments to Economy PDF Print E-mail
News Releases - Business & Economy
Written by Cynthia Magnuson   
Tuesday, 22 November 2011 16:24

New Study Finds Economic and Political Uncertainty Top Impediments to Small-Business Growth

WASHINGTON, D.C., Nov. 22, 2011 — A new study examining impediments to growth in the small-business sector reveals that 72 percent of small-business owners would like to expand by adding employees within the next five years, but various impediments are currently standing in their way.

According to Growth – External Factors, a report prepared by the National Federation of Independent Business (NFIB) Research Foundation, uncertainty and weak sales are the two primary impediments to small-business growth.

“There is no question that small businesses are responsible for a significant portion of the job creation in our economy,” said William J. Dennis, report author and senior fellow at the NFIB Research Foundation. “Their growth and success is often contingent upon a litany of factors beyond their control – but within the purview of policy-makers in Washington. Impediments to growth may not be easily overcome, but if we are ever to bridge the gap between desired and actual growth, government officials must look at the problems small businesses face. Understanding the challenges should help with the formulation of policies that would help them to thrive.”

The study found that business uncertainty and weak sales—identified as the two primary impediments to small-business growth— are currently limiting the ability of many owners to expand. While economic concerns rank high in the minds of owners, a large number of small businesses also report that uncertainty is a significant factor in making business decisions. Not surprisingly, the single most important indicator that would renew small-business owner confidence in business conditions is increased sales in their businesses. This is a fact supported by NFIB’s monthly Small-Business Optimism Index report, which has identified poor sales as the top business concern for small firms for 16 quarters running.

Other notable survey findings include:

  • Uncertainty is a growth impediment impacting 61 percent of small employers; only 25 percent say uncertainty does not impact them. However, owners of the smallest firms and owners of the young firms were more likely to identify uncertainty as a concern than owners of larger small firms and more established firms. And while the majority of small employers who believe that uncertainty is a hurdle think of it as economic in nature (83 percent), a comparatively large number term their uncertainty as related to political questions. An extraordinary 51 percent who think uncertainty is an impediment to growth (38 percent of the small-employer population) blame the current political situation at least in part as obstructing their growth.
  • While the adverse impact of regulation is often challenging to identify, 40 percent of small employers say that regulatory or legal issues are an impediment to growth. The complex labyrinth of regulations as opposed to a specific regulation or set of regulations was more often cited as an obstacle, with 63 percent of this group (31 percent of the population) reporting that a current investment or project was impacted by a regulatory matter. One-quarter of those who find regulations to be a burden either cancelled a project scheduled for the next six months or abandoned investment and/or project plans.
  • Forty-one (41) percent reported the lack of finance as an impediment to growth and 19 percent ranked it a serious matter. Though 15 percent of small employers asserted that the lack of finance was their biggest obstacle to growth, 49 percent termed it a minor or no obstacle. More than half (53 percent) of small firm owners surveyed think that internally generated cash flows will be their most important source of financing desired investment over the next five years. Bank loans will be the second most common source. However, 33 percent of those identifying lack of finance as an impediment to growth say that existing financial obligations are “seriously constraining” their ability to finance desired business investment and another 44 percent say that it is constraining.
  • With the unemployment rate near 10 percent, finding skilled workers is still a struggle for small-businesses. Sixty-one (61) percent of those surveyed (24 percent of the total population) said the lack of skilled employees is an impediment to growth and indicated that they would hire at least one additional employee at the current market wage rate in the next six months if they could find people with appropriate skills. Over 37 percent (9% of the population) would employ more than one.
  • Just 15 percent of small-business owners cite the lack of a strong management or advisory team as an impediment to growth. Of the group currently possessing a management team, 47 percent are highly confident their current team can provide the necessary assistance to reach the firm’s growth objectives in the next five years. Most citing this impediment want to add management employees rather than to change the ones they have.

The latest NFIB Small Business Poll, Growth – External Impediments, is available at http://www.nfib.com/growthstudy.

###


 
Governor Quinn Encourages Consumers to Support Illinois’ Small Businesses this Holiday Season PDF Print E-mail
News Releases - Business & Economy
Written by Katelyn Tye   
Tuesday, 22 November 2011 16:23

Proclaims November 26 “Small Business Saturday”

CHICAGO – November 22, 2011. Governor Pat Quinn today proclaimed Saturday, Nov. 26 as "Small Business Saturday" in Illinois to encourage shoppers to support the more than 500,000 small businesses in our state. Consumers are encouraged to use the Saturday after Thanksgiving, Nov. 26, between "Black Friday" and “Cyber Monday” – traditionally two of the busiest shopping days of the year – to shop at small businesses around the state.

“Thanksgiving weekend traditionally serves as the kick-off for the holiday shopping season, and we want all Illinois businesses to have a strong showing,” Governor Quinn said. “I encourage people throughout Illinois to use this time to show their support for local merchants that contribute to our local economies, putting people to work and keeping our economy moving forward.”

Small business success is critical to Illinois’ and the nation's overall economy. According to the U.S. Small Business Administration, there are approximately 28 million small businesses in the United States, which have created 65 percent of new jobs over the past two decades. For every $100 spent in locally-owned, independent stores, $68 returns to the community through taxes, payroll and other expenditures, according to the 3/50 Project, a small business advocacy group.

“If every Illinois small business was able to create one new job, we'd lower the unemployment rate five points," DCEO Director Warren Ribley said. "'Small Business Saturday' continues our efforts to boost locally-owned businesses throughout Illinois by giving them the tools and support they need to succeed and grow.”

In October, Governor Quinn launched Advantage Illinois, a new program for small businesses to access capital, thanks to more than $78 million from the federal State Small Business Credit Initiative (SSBCI). Advantage Illinois consists of three programs to spur institutional lending to small businesses and one program to leverage private venture capital in start-ups and high-growth businesses. Illinois expects to leverage at least $10 in new private lending for every $1 of federal funding, generating more than $800 million in private investments in Illinois' small businesses.

For more information on the state’s small business resources, visit www.ildceo.net. A copy of the Governor’s proclamation is attached.

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Don’t Let Black Friday Deals Leave You in the Dark PDF Print E-mail
News Releases - Business & Economy
Written by Chris Coleman   
Tuesday, 22 November 2011 11:28
BBB Tips Help You Shop Smart, Online or at the Mall 

These days Black Friday deals seem to be out before the Thanksgiving turkey even gets cold; leaving many consumers overwhelmed with the pressure to buy, buy, buy.  The BBB recommends you do your research before shopping to ensure advertised deals are all they’re cracked up to be.

“Some Black Friday deals may look good on the surface, but quantities may be extremely limited or the size of the discount greatly exaggerated.  Check prices at several retailers and read advertisements carefully to make an educated decision on whether it’s worthwhile to stand in line or miss a good night’s sleep,” said Chris Coleman, BBB President/CEO. Shopping online can be a way to avoid crowded stores, but shoppers need to use extra caution when shopping on the web.

Whether you choose to buy online or at the store, be sure to:

 

  • ·  Protect your personal information. Stick to well known and trusted websites. When shopping at stores, keep your card out of sight and safe.
  • ·  If the site is secure, its address should start with https://. You also may see a picture of a small closed lock in address bar.
  • ·  Know the company’s refund and return policies. Are there restocking fees? Do you have to pay shipping costs on returns?
  • ·  Do not rely on pictures of a product. Read the description and check model numbers, if applicable.
  • ·  Be cautious of free offers. Free offers are often followed by an open-ended enrollment in a program that automatically bills your credit card account. Before ordering anything online, make sure you click on and read all terms and conditions.
  • ·  Pay with a credit card rather than a debit card. If you suspect fraud or don’t receive your order, credit cards afford the best protection in the event of a dispute.
  • ·  Obtain a tracking number for all shipments.
  • ·  Print out the orders and keep receipts.
  • ·  Be aware of phishing. Don’t respond to emails that ask for your credit card or bank account number or other personal information. Legitimate businesses do not send emails claiming there is a problem with an order or account.  Call the company or find the customer service form on the company website to confirm any problem.
Check a company’s BBB Business Review before you do business with a company or charity by going to www.bbb.org or by calling 800-222-1600. For more advice you can trust from your BBB, visit www.iowa.bbb.org.

 
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