Finance Space

What to do about corporate tax rates represents a key difference between Obamanomics and McCainomics. John McCain wants to cut them. Barack Obama wants to raise them, at least on oil companies, through a windfall profits tax. But maybe they’re both wrong. Maybe we should just get rid of these levies altogether. Here are 20 reasons why it’s time to sack the corporate income tax:

1) The United States has the second-highest corporate tax rate in the world, just shy of 40 percent when you combine state and federal taxes.

Perhaps the most remarkable aspect of the credit boom that preceded the current bust was the belief of professional investors that they had found a way to increase their profits without taking on risk.
Very sophisticated financial models showed no risk whatsoever in AAA-rated mortgage securities. The underlying mortgages might lose money, the models showed, but built-in safeguards assured that the securities were well protected.

It turned out the models were wrong.

The idea that the route to higher profit runs through higher risk has been around for a long time. The phrase “nothing ventured, nothing gained,” dates back to Geoffrey Chaucer in 1374, about six centuries before computers began to run regressions to find ways to get rich without risk.

Provincial Finance’s 11,000 debenture-holders will receive another 8c next month, taking their total recovery to 90.5c in the dollar in just over two years since receivership.

That is one of the few pieces of good news in a sector littered with more than 25 collapsed finance companies.

Provincial receiver Maurice Noone said the 8c payment would be made on September 12. An additional small payout would be made related to litigation against Veda Advantage, and that court hearing was expected to start early next year. It was unclear when the payout would be.

Fitch Ratings has withdrawn the following ratings without resolving the Rating Watch Negative status for Newcourt Street Finance Limited, effective immediately:
–EUR35,000,000 class A-1 notes ‘AAA’;
–EUR45,000,000 class A-2 notes ‘AAA’;
–EUR45,000,000 class B notes ‘AA+’;
–EUR39,000,000 class C notes ‘AA’;
–EUR33,000,000 class D notes ‘AA-’;
–EUR30,000,000 class E notes ‘A’;
–EUR15,000,000 class F notes ‘A-’;
–EUR15,000,000 class G notes ‘BBB’;
–EUR12,600,000 class H notes ‘BB+’.

The issuer announced noteholder approval removing Fitch as a rating agency from certain documents of the transaction. As a result of this amendment, Fitch does not expect to receive future reporting for this transaction.

The world’s leading provider of financial services to institutional investors, announced today that David Puth has been named to a newly created position as head of State Street’s investment research, securities finance and trading activities worldwide. Puth, age 51, will report to Jay Hooley, president and chief operating officer of State Street. He will also join the company’s Operating Group, State Street’s senior-most strategy and policy-making team.

KPMG Corporate Finance LLC, a full service, independent, middle-market investment bank, today announced that it was the exclusive advisor for the privately-owned Concept Mining and The Ridge Land Group on the sale of its metallurgical coal business in West Virginia to ArcelorMittal, the world’s largest integrated metals and mining company. The transaction adds in excess of 57 million metric tons of saleable and recoverable coal reserves and resources in the Appalachian region to ArcelorMittal.

Bank of America Corp., the nation’s second-largest bank, said David Flannery is joining the company as global head of leveraged finance, starting in November.

Flannery had the same title at Deutsche Bank AG, where he has worked since 1992, according to a statement today from Charlotte, North Carolina-based Bank of America. He will report to Bruce Thompson, head of global capital markets, the bank said.

Chief Executive Officer Kenneth Lewis is expanding the corporate and investment bank, affirming his commitment to the unit after losses last year triggered a management shakeup and 650 job cuts. The unit’s profit grew 3.2 percent in the second quarter and writedowns on securities fell to $645 million from $1.47 billion in the first quarter.

Bridge Finance Group announced the completion of a $5.0 million revolving line of credit and a $2.0 million term loan to Wafer Reclaim Services, LLC (”WRS”). The Company is headquartered in San Jose, California. WRS is engaged in the business of sorting, stripping, polishing, and cleaning used wafers for semiconductor and solar manufacturers. WRS made use of the proceeds to acquire Montco Silicon Technologies which greatly enhances the existing credit by adding customer diversification, east coast operations and additional product lines to WRS’s existing business.

The U.S. Senate yesterday failed yet again to approve a measure that would extend solar tax credits, which are due to expire at the end of 2008.

As Reuters notes, a measure which would have extended the tax credits for eight years failed a key procedural vote.

In a statement, Solar Energy Industry Association president Rhonse Resch warned that a failure to extend the tax credit could damage the domestic solar industry:

Over the years, in response to growth, both organic and through acquisition, banks and financial services organisations have built separate IT systems to support the different parts of the business. In addition to this, the industry has undergone considerable consolidation, yet many IT environments remain “silo-ed” for a considerable amount of time as integrating disparate systems can be a challenging and complex task.