SAUL LOEB/AFP/Getty Images(WASHINGTON) -- In an election-year showdown likely to hinge on the economy, President Obama and his Republican rivals are all fashioning themselves as corporate tax slayers.
Obama on Wednesday unveiled his proposal to cut the corporate tax rate from 35 to 28 percent, ultimately higher than taxes under Mitt Romney’s plan, which would lower corporate rates drop to 25 percent.
The current nominal U.S. corporate tax rate -- 35 percent -- is the highest in the world behind Japan.
Rick Santorum, Ron Paul and Newt Gingrich say they would each make the statutory rate even lower -- slashing it to 17.5, 15 and 12.5 percent respectively.
But behind the top line numbers and a consensus that corporate rates are too high, differences in the fine print (or lack thereof) suggest bipartisan reform isn’t going anywhere fast.
Cutting corporate tax rates as proposed will require significant offsets to avoid blowing a hole in the federal budget, experts say. None of the candidates has fully or specifically articulated details on how their plans might address this.
The Obama administration claims it would, “eliminate dozens of tax loopholes and subsidies” to cover the cost, including those for oil companies, hedge fund managers and private equity firms, but doesn’t list precisely which ones.
Officials also say they would impose a new minimum tax on foreign earnings and end special preferences for companies that move work offshore, netting $250 billion more from corporations over the next 10 years.
That some corporations would end up paying more in taxes than they do now is a non-starter for many Republicans.
The Republican candidates, none of whom has advocated widespread elimination of loopholes or subsidies, favor extending additional tax credits to corporations. The offset would come on deep cuts in government spending, they say.
Romney advocates temporarily extending the investment tax credit and expensing allowance. He also favors a tax holiday for repatriation of foreign profits with an eventual elimination of the existing system.
Santorum also favors expanding the research and development tax credit from 14 to 20 percent and allowing all companies to fully expense investments in new equipment.
One tax policy priority that only Obama and Santorum have in common: special treatment in the corporate tax code for U.S. manufacturers.
Santorum wants companies that manufacture goods in America not to be taxed at all. Obama doesn’t go as far, but favors a special lower effective tax rate of 25 percent for manufacturers.
Stockbyte/Thinkstock(WASHINGTON) -- Existing home sales increased 4.3 percent in January, according to a report by the National Association of Realtors. Housing units were sold at a seasonally adjusted annual rate of 4.57 million units; a warm winter could have been one reason homebuyers jumped the gun on the usually busy spring real estate season.
The housing market has a long way to go before a full recovery. Home prices are still falling and foreclosure sales make up a large part of total sales.
Here are some positive signs from Wednesday’s report:
Sales of previously occupied homes rose to the highest pace in nearly two years.
The number of previously owned homes on the market dropped to 2.31 million, the fewest since March 2005. At the current sales pace, it would take 6.1 months to sell those houses, the lowest since April 2006. The glut of inventory has been a big problem in the housing market.
There has been an improvement in sales in three of the past four months.
Sales still remain well below normal pre-recession levels. Foreclosure-related sales were more than a third of the total.
KIMIHIRO HOSHINO/AFP/Getty Images(LOS ANGELES) -- Glasses that function like a smartphone? Google plans to introduce what appear to be the specs of the future by year’s end, The New York Times reports.
According to unnamed sources, which the Times described as Google employees, the glasses will be Android-based and include a small screen inches from the wearer’s eye. The glasses also will be sold to the public for $250 to $600.
“We are not going to comment on rumor or speculation,” a Google spokesman told ABC News via email.
The glasses will reportedly have a 3G or 4G connection, several sensors and a built-in camera to watch the world in real time and relay information about locations and friends nearby.
Seth Weintraub, a blogger for 9to5Google, reported on the glasses in December and February. Earlier this month, he reported that the display on the Google glasses would be on just one side and that the current navigation included head tilting in order to scroll and click.
Rob Enderle, the head tech analyst at his Enderle Group, said head-mounted displays like Google’s glasses had been in the market for years. He said, however, that earlier versions like a pair made by Sony nearly 10 years ago were $25,000, heavy and had a power supply five times that of today’s smartphone. In addition, many of them also put the computer screen directly in front of the wearer’s face, rendering one blind to the outside world.
“Google’s glasses are tied to something we call ‘augmented reality,’” Enderle told ABC News via email. “This takes virtual information and overlays it onto a real-world image.”
“This could allow you to see in the dark, pick out things like powerlines, for instance, if you were flying a helicopter low or see an approaching Starbucks long before you got clear line of site,” he said.
“I think this will be the most exciting technology product release this year,” Weintraub wrote.
Tomohiro Ohsumi/Bloomberg via Getty Images(WASHINGTON) -- Honda is recalling 45,747 Odyssey minivans due to a problem with the model’s liftgate.
“[T]he gas-filled struts that help to raise and support the liftgate of vehicles equipped with a power liftgate system may be prone to early life failures due to a manufacturing flaw,” Honda said in its recall notice. “The flaw can result in a leak of the pressurized gas, leading to reduced strut performance.”
The company says the potential malfunction -- affecting certain 2008-2009 models -- could cause the vehicle’s liftgate to close unexpectedly, posing a risk to those around it.
Honda says its dealers will fix the problem at no charge.
Justin Sullivan/Getty Images(REDMOND, Wash.) -- In an amusing viral marketing video, Microsoft has gone on the offensive, attacking Google Docs, the search giant’s collaborative, online word processing tools.
The video offensive is an effort to promote its own Office 365 service.
In the video -- set to a spoof of the song from the Bruce Willis comedy series Moonlighting -- Googen Apperson, a Google Docs salesman, tries to convince an executive to use the software in her organization. But she points out alleged flaws in the Docs service, including how it doesn’t work when you don’t have an Internet connection. She is interrupted when an R&B singer breaks into song about how Google killed off a number of services.
“Google killed of Gears and Wave/They buried to Buzz the same way/If Google Apps meets its grave, your business is hosed,” he sings.
Microsoft calls it Googlighting and explains in its accompanying blog post that it is, “what happens when the world’s largest advertising business tries to sell productivity software on the side.”
“If these concerns and current revelations about Google’s privacy policies have you troubled, this may be a great time to check out Office 365, the online collaboration solution for businesses who don’t want their documents and mail read,” the video states.
Microsoft has also called out Google for circumventing privacy policies. Google did not immediately respond to ABC News’ request for comment on the new video.
Alex Wong/Getty Images(WASHINGTON) -- The Obama administration is set to unveil a proposal on Wednesday that will call for lowering the country's corporate tax rate to 28 percent, a senior administration official tells ABC News.
Doing so would put the U.S. in line with its major competitors and encourage greater investment. At 35 percent, the nation's current corporate tax rate stands among the highest in the world.
The president's plan will also include cutting the effective rate on manufacturing to 25 percent, according to the official. Both deductions would be paid for by closing dozens of tax loopholes and eliminating subsidies.
Furthermore, the official says the proposal will introduce a minimum tax on foreign earnings to discourage moving jobs overseas.
Details of the plan will be announced Wednesday by the Treasury Department.
Comstock Images/Thinkstock(NEW YORK) -- If you converted a traditional IRA to a Roth IRA a few years back, get ready to pay the taxman.
In 2010, millions of Americans who wanted to convert their traditional IRA to a Roth were given a tax break; they were able to split the claimed income into two years -- 2011 and 2012. But now, the first half of that income needs to be claimed on returns filed this spring.
"People may have sometime taken an action in the prior year and then forgotten that they did that," says Kathy Pickering with H&R Block. "This is a great time to look back and say, 'Did we do that conversion? What's the income that I'm going to need to recognize? What are the taxes that I'm going to have to pay on that and do I have the money to pay those taxes?'"
And it could potentially be a lot of money -- a $100,000 conversion means taxpayers would have an extra $50,000 in income to report this year.
Taxes for new IRA conversions now have to be paid in the year of the conversion.
Win McNamee/Getty Images(WASHINGTON) -- Playing defense on rising gas prices, President Obama plans to promote his energy policy in a visit to Miami on Thursday, senior administration officials said Tuesday.
Administration officials said the president’s speech at the University of Miami will build off his State of the Union address, when he called energy one of the four “pillars” for “an America built to last,” and is not a direct response to the political heat Obama has been taking for the pain at the pump.
The president is expected to outline his all-of-the-above approach to energy production, calling for a clean energy standard and the need to eliminate oil and gas subsidies, among other things.
While Republicans on Capitol Hill and the campaign trail have blasted Obama’s energy policy in recent days, the White House is confident the president has a solid case for the progress he’s made toward securing a strong energy future.
In the short term, administration officials said there’s no magic solution to immediately bring down gas prices and declined to say whether the president would consider tapping the Strategic Petroleum Reserve.
The president’s Thursday speech will kick off a series of events in the coming weeks focused on American energy.
Cristina Arias/Getty Images(NEW BRUNSWICK, N.J.) -- Johnson & Johnson has chosen a new CEO as it tries to recover from a series of product recalls. Effective April 26, 2012 -- the day of the company's annual shareholder's meeting -- current CEO Bill Weldon will hand the reins over to Alex Gorsky, a Johnson & Johnson veteran.
Sixty-three-year-old Weldon, who has served as CEO of Johnson & Johnson since 2002 and will remain on the company's board of directors as chairman, said the selection process for his successor was thorough.
"This succession decision involved a rigorous, thorough and formal multi-year process, which included consideration of two superbly qualified internal candidates, as well as outside candidates," Weldon said, according to a company statement. He added, "The future of Johnson & Johnson is in very capable hands."
Gorsky first joined Johnson & Johnson as a sales rep for Janssen Pharmaceutica. By 2001, Gorksy had advanced his way to president of Janssen. In 2003, he was promoted to oversee Johnson & Johnson's pharmaceutical business in Europe, the Middle East and Africa before leaving the company in 2004. Gorsky returned to Johnson & Johnson after four years as head of pharmaceuticals in North America at Novartis. In 2009, Gorsky was appointed as worldwide chairman of the surgical care group as well as the company's executive committee.
Gorsky, 51, has also been nominated for election to the company's board of directors.
Johnson & Johnson generated $65 billion in sales in 2011, according to Bloomberg. Still, the quality of various recalled products from artificial hips to OTC brands such as Tylenol have cost the company more than $1 billion in lost sales, The Wall Street Journal reports.
According to Bloomberg, Gorsky will earn $1.2 million as the ninth CEO of the world's second largest health care company.
Kevork Djansezian/Getty Images(WASHINGTON) -- Gas prices continued an upward climb, settling at an average price of $3.59 a gallon, according to the U.S. Energy Information Administration.
In some places, consumers are already seeing gas prices over $4. The weekly gas price average, released Tuesday, was up 40 cents from a year ago, and up by 7 cents from last week.
"I'm expecting the national average to float dangerously close to $4 a gallon," Patrick DeHaan, GasBuddy.com's senior petroleum analyst, told ABC News. DeHaan said that following last week's average price per gallon of $3.53, gas prices are very close to "that psychological $4 mark."
"We are on course to break through $4 nationally," he said. "Some of these major metro areas could hit $4.50 or even higher. This year we may have a run for the money in knocking down the record from 2008."
The peak national average retail price of regular grade gasoline hit $4.114 per gallon on July 7, 2008, according to the EIA.
In 2011, the real annual average for a gallon of regular gas reached $3.56, which was up more than a $1.00 from the 2010 average of $2.90, according to the EIA. The EIA, which has compiled data since 1919, has the previous record high as $3.45 for 1981.
"We may set a new record," said DeHaan. "I'm still expecting 2012 to be the highest yearly average we have ever paid."
One of the reasons for the climb is Iran.
"Iran continues to make threats, and we continue to hear rhetoric about how they will cut off shipments to the U.S. or cut off access through the Strait of Hormuz," DeHaan said.
On Monday, Iran's oil ministry announced it had halted crude shipments to British and French companies.
"They're using oil as a weapon," DeHaan said. "The situation is tied to Iran's nuclear ambitions and the United States and European Union seem hell bent on making sure they drop their nuclear ambitions -- placing them on a collision course with who will act first."
Iran holds the world's fourth-largest proven oil reserves and the world's second-largest natural gas reserves, according to the EIA.
"The price that affects the price you pay at the pump has gone up just as much and that's why you're starting to see retail prices rise," said Ben Brockwell of Oil Price Information Service.
Brockwell said the situation in Iran and the EU may be one reason that the futures market is higher, but said he does not believe the reasoning is completely "justifiable."
"There's more to this than Iran and Europe," he said. "It's something else that is piling on.
"I think demand in oil consumption is growing at a rapid pace in developing countries like China and India," Brockwell said. "There's also sense that the U.S. economy is improving, and with that oil demand will be improving."
Regardless of whether the U.S. economy is improving, analysts don't expect gas prices to come down any time soon.
"This is somewhat a big game of chess and U.S. motorists are held victim," DeHaan said. "In fact, motorists all over the world are held victim."
Hemera/Thinkstock/ABC News(NEW YORK) -- The Dow Jones industrial average closed up Tuesday after hitting the intra-day high of 13,000 for the first time since May 2008. The stock index is at a nearly four-year high, closing just under 13,000.
The Dow closed at 12,967, up 0.13 percent, while the S&P 500 closed at 1,362, up 0.08 percent.
Paul Larson, chief equities strategist for investment firm Morningstar, said the 13,000 mark was an arbitrary number without much intrinsic value to the markets. Still, it is twice the intra-day market low of 6,440 at the height of the recession on March 9, 2009.
The Dow opened the morning at 12,980 while the S&P 500 opened to 1,364, which was that index's highest close since 2008. The Dow Jones industrial average closed Friday at 12,950, up 0.35 percent, and the S&P 500 closed at 1,361.
With European finance ministers agreeing to a new bailout package for Greece, all eyes were watching whether the Dow would pass the psychological threshold of 13,000 after being closed Monday in honor of Presidents Day. The index briefly passed the mark shortly before 11:30 a.m. ET before returning to about 12,995.
"There's nothing magical about the 13,000 level, but it could help boost investor sentiment to some extent," Scott Brown, an economist with Raymond James, said.
Early Tuesday morning, eurozone finance ministers finished seven months of deliberating in Brussels and agreed to a bailout plan for Greece of 130 billion euros, or about $171.5 billion, its second in three years. Martin Koehring, an economist for the Economist Intelligence Unit, said that without the bailout, Greece faced the prospect of defaulting on a 14.5 billion euro, or about $19.1 billion, bond redemption due by March 20.
Mario Tama/Getty Images(NEW YORK) -- The Dow Jones industrial average on Tuesday hit the intraday high of 13,000 for the first time since May 2008. The stock index is at a nearly four-year high, and a few points from closing at 13,000, which it has not done since May 2008.
With European finance ministers agreeing to a new bailout package for Greece, all eyes were watching whether the Dow would pass the psychological threshold of 13,000 after being closed on Monday in honor of Presidents Day. The index briefly passed the mark shortly before 11:30 a.m. Eastern Time before returning to about 12,995.
The Dow opened Tuesday morning at 12,980, then dropped lower. The S&P 500 opened to 1,364, which was that index's highest close since 2008. The Dow Jones Industrial Average closed Friday at 12,950, up 0.35 percent, and the S&P 500 closed at 1,361.
Eurozone finance ministers finished seven months of deliberating in Brussels and agreed to a bailout plan for Greece of 130 billion euros, or about $171.5 billion, the country's second infusion in three years. Martin Koehring, an economist for the Economist Intelligence Unit, said without the bailout, Greece faced the prospect of defaulting on a 14.5 billion euro -- or about $19.1 billion -- bond redemption due by March 20.
Creatas/Thinkstock(NEW YORK) -- With the tax filing deadline less than two months away, many are making plans to submit their tax returns soon. But as Eric Smith with the IRS explains, some people don't have to file.
"If your income is very low chances are you are not required to file a return -- but there are many situations where you'll want to file a return anyway," he says.
ABC News asked tax preparer Janice Hayman about who might not need to file.
She says, "There may be retired people that don't need to file a tax return if their taxable income is low enough."
And if you have low or moderate income, be aware of the earned income tax credit.
"If you're trying to make ends meet on about $49,000 or less there's a good chance you may qualify for this credit," Hayman notes. "About one in five eligible tax payers fail to claim the credit."
Tomohiro Ohsumi/Bloomberg via Getty Images(TOKYO) -- A senior executive of scandal-plagued company Olympus was found dead outside his apartment in the Indian city of Gurgaon in an apparent suicide.
Tsutomu Omori, 49, head of Olympus Medical Systems in India, was found hanged near a park in his apartment complex, according to the Times of India. Police believe Omori committed suicide late Sunday. He left behind two suicide notes written in English and Japanese. One read, “I am sorry for bothering you,” according to police.
The Japanese camera maker has been engulfed in a massive financial scandal involving efforts to cover up $1.5 billion in losses. Earlier this month, Tokyo police arrested seven Olympus executives for their roles in one of Japan’s largest corporate scandals.
There have been no reports to suggest a link between Olympus’s woes and Omori’s death, however.
Hemera/Thinkstock(NEW YORK) -- With European finance ministers agreeing to a bailout package for Greece, global stock markets are trending upward on Tuesday. Equity markets in the U.S. opened up, after being closed on Monday in honor of Presidents Day, with all eyes watching if the Dow would pass the 13,000 mark.
On Tuesday morning, the Dow Jones Industrial Average opened to 12,980, approaching its highest level since May 2008. The S&P 500 opened to 1,364, also approaching its highest level since 2008. On Friday, the Dow closed at 12,950, up 0.35 percent, and the S&P 500 closed at 1,361.
Euro-zone finance ministers finished seven months of deliberating in Brussels Tuesday and agreed to a bailout plan for Greece -- its second in three year -- of 130 billion euros, or about $171.5 billion. Martin Koehring, economist for the Economist Intelligence Unit, said without the bailout, Greece faced the prospect of defaulting on a 14.5 billion euros -- or about $19.1 billion -- bond redemption due by March 20.
"If we get a resolution or even improvement as far as Greece and stress in the financial markets is concerned, that could boost some of the gains we're seeing in the stock markets," Nick Bennenbroek, head of currency strategy for Wells Fargo, said ahead of the deal.
Meanwhile, back in the U.S., Home Depot announced strong fourth-quarter earnings Tuesday, including a 32 percent increase in net income to $774 million. Kraft reported a fourth quarter net income of $830 million, up from $540 million, in line with expectations.
However, Walmart reported a 15 percent drop in profit for the fourth quarter to $5.16 billion, missing estimates.
