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How can it be that you pay more to the IRS than General Electric?
As you work on your taxes this month, here's something to raise your hackles: Some of the world's biggest, most profitable corporations enjoy a far lower tax rate than you do--that is, if they pay taxes at all. The most egregious example is...
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U.S. companies' cash balances have never been bigger, but getting decent returns from their war chests poses a challenge.
As they emerge from a crippling recession, U.S. companies are rolling in a record amount of excess cash. Now that the economy is improving, corporate boards are under pressure from investors to put their wealth to good use. But should they try to grow their existing businesses, invest in new ones, buy competitors, boost
dividends, or repurchase shares? "We like companies with healthy balance sheets," says Cliff Draughn, chief investment officer at Excelsia Investment Advisors. "The question is whether they're hoarding too much cash, and whether they should be spending some of it." A Standard & Poor's analysis of large-cap
companies found...
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After a pause in 2009, reflecting growing concerns over the economy, innovation is once again a top strategic priority for a large majority of companies in 2010, according to a new report by The Boston Consulting Group (BCG).
The report, titled Innovation 2010: A Return to Prominence-and the Emergence of a New World Order, is being released today. The report, which was based on a global survey of nearly 1,600 senior executives that BCG conducted in partnership with BusinessWeek, also reveals that companies are increasing their
innovation spending and that their satisfaction with the return on innovation spending has climbed. But companies remain somewhat cautious, keeping a close eye on the cost of their innovation activities and raising their emphasis on conservative bets. "Companies took...
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With the unemployment rate still holding stubbornly near 10%, Congress this month approved a new $18 billion bill that offers tax breaks to employers who add certain new employees to the payroll.
President Obama signed it on March 18. The so-called Hiring Incentives to Restore Employment (HIRE) Act comes in two parts:
Immediate payroll tax relief for wages paid to certain new hires...
Auditing your auditor Don’t just settle for your old contract, do some research first, and save big money in the process.
About $1.2 trillion in off-balance-sheet assets could end up on the balance sheets of banks that have yet to claim them, or "on no one's balance sheet," a new report claims.
New accounting rules governing off-balance-sheet transactions went into effect for most companies in January. As a result, 53 large companies have already estimated that they will have put back an aggregate $515 billion in assets to their balance sheets during the first quarter, according to a new study of S&P 500
companies released by Credit Suisse. But the future state of the companies' balance sheets remains unclear, since they only consolidated...
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Tax audits of big companies have declined as the Internal Revenue Service shifts its attention to smaller businesses.
The Internal Revenue Service has cut the amount of time it spends auditing large companies by a third since 2005, while reducing the number of large companies audited by 22%, according to a new study. In fact, last year the IRS audited only one in four corporate returns reporting assets of $250 million or more, says the
study, which was conducted by the Transactional Records Access Clearinghouse (TRAC), a research organization sponsored by Syracuse University. While IRS audits of large companies dropped by 1,000 to 3,675 between 2005 and 2009, audit rates fell even faster, says TRAC (see chart below). In 2005 the agency audited
43 out of every 100 big-company returns, but by 2009 the audit rate had fallen to 25 out of every 100. The downward trend isn't new:...
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[401K] sea change Helping your employees benefit the most from their 401(k) plans is not easy but it can be done!
Companies now play a much more active role in guiding employees’ 401(k) investment decisions.
One year ago, 401(k) plans were in crisis: account balances had plunged by double digits, employers were suspending matching contributions, and the volatility of the Dow made it uncertain as to whether the bottom had been reached. The situation improved markedly in 2009. Fidelity Investments reports that participants in
the millions of 401(k) accounts it administers enjoyed a 28% pop in 2009, a rate that beats the S&P 500 by 2%. (On the downside, the positive performance of 2009 simply put balances back at 2007 levels.) But while plan participants managed to make up some lost ground last year, that bit of good news
obscures a darker truth:...
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The IRS recently announced that the standard mileage rate for business drivers in 2010 is just a half a buck for each business mile traveled.
(IRS Revenue Procedure 2009-54) That's a nickel a mile less than the rate allowed in 2009. Strategy: Switch to the "actual expense" method for this year. Even if you initially started using the standard mileage rate in January, you still can come out ahead if you change your record-keeping habits now. However,...
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Stockholders and company management are finding stock option exchange programs more appealing than in the past.
The substantial declines in public equity share prices that occurred as the result of the economic difficulties over the last two years have significantly impacted the value of stock options held by many employees of public companies. Large numbers of stock options are currently out-of-the-money, causing the incentive
and retention features of many public company stock option programs to be diminished or, in some cases, obliterated. To address this issue, in 2009, approximately 150 companies put an option exchange program, in which underwater options are exchanged for new options or restricted stock, to a shareholder vote. In
contrast,...
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Fixing Big Finance Changes in 1980's Washington policies towards Wall Street helped create the bubble and the burst. Now how do we fix it?
Do the math Underfunding in state budgets added to the national budget creates some very scary results.
The real solutions for financial-industry failure.
President Obama, aware that the public's unhappiness with the financial industry has hurt his standing, started his second year in office by attacking Big Finance. "If there's one thing that has unified Democrats and Republicans, and everybody in between, it's that we all hated the bank bailout," the President said in January
in his first State of the Union address. "I hated it. You hated it. It was about as popular as a root canal." But Obama's proposed fixes, including a new tax on large financial institutions and a new "Volcker rule" that would prohibit commercial banks from owning hedge funds or proprietary-trading operations, won't ensure that it
never happens again. To protect the economy from financial meltdowns, it's necessary to understand how we got this financial meltdown - and then the solutions naturally follow...
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For Goldman Sachs, it was a relatively small transaction. But for the bank - and the rest of Wall Street - the stakes couldn't be higher.
Accusations that Goldman defrauded customers who bought investments tied to risky subprime mortgages have only just begun to reverberate through the financial world.
The civil lawsuit that the Securities and Exchange Commission filed against Goldman on Friday seemed to confirm many Americans' worst suspicions about Wall Street:...
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