Receiving Wide Coverage ...
Hold it, They've Got Ideas: A funny thing happened on the way to the Republican presidential debate last night - a candidate actually made a policy proposal. Before all the name-calling, piling on the front-runner du jour and renewed etymological analysis of the word "conservative," Mitt Romney offered a plan to cut personal income taxes on the same day President Obama proposed to cut the corporate tax rate (more on that in a moment). But the Romney tax plan hardly came up in the debate, the Journal reports. In fact, the economy took a backseat to social issues and the latest round of posturing among the candidates vying for the GOP nomination, the Times says.
If you crave more policy wonk meat, dive in to this report on a study that carves up the candidates' claims they would rein in the mounting federal debt.
Taxing Questions: Romney and Obama did provide tax plans to sink your teeth into, sort of.
Banks may want to send part of their meal back, however. President Obama asked Congress to reduce the top corporate tax rate to 28%, from 35%, and offer breaks to manufacturers that would set their maximum effective rate at 25%. Part of this effort would be funded by eliminating the tax code of dozens of loopholes and subsidies for corporations, the Times and Journal report.
Banks and insurers would pay more because of new limits on the tax deductibility of interest on debt, and business groups and some Republicans attacked it for various reasons, the Journal's story says.
The Times reminded readers not to look for any action this year. Senator Orrin Hatch of Utah, the ranking Republican on the Finance Committee, called Obama's proposal "profoundly disappointing in its lack of detail," and said that tax reform must not be limited to corporate taxes alone, the Times says.
The president's plan also would establish a minimum tax on multinational corporations' foreign earnings — something an FT opinion piece by Robert Pozen called "controversial and counterproductive."
Meanwhile, Romney called for reducing marginal tax rates by 20% in all six income brackets and eliminating the alternative minimum tax. He would limit certain deductions, which he did not specify, to make up for the lost revenue. Romney is the last of the four major Republican candidates to offer a plan for personal income taxes. A very cool chart comparing their plans, and President Obama's, accompanies the Journal story.
A Journal opinion piece was largely complimentary. "A mountain of economic research shows that a marginal-rate cut does far more than tax holidays or targeted tax credits to change the incentives to invest and hire workers, and thus provides the most economic lift." The FT summed up the Obama and Romney proposals this way: "The two plans show that there is strong support for reforms to the bafflingly complicated US tax system but division about how much revenue the system should raise."
Though the Romney plan got more kudos than the Obama one, the FT says the president is benefiting from the Republican free-for-all and recent congressional victories. He is perhaps "enjoying his best moment in office since his January 2009 inauguration."
Schapiro on the Spot: Mary Schapiro, the chairwoman of the Securities and Exchange Commission, defended the agency's record of settling fraud cases with Wall Street companies. The SEC is considering charging fees to high-frequency traders for the many buy and sell orders that are later canceled, among other reforms, she also said.
New Guys Are the Old Guys: A group of former Morgan Stanley executives has launched a new boutique investment-banking firm, Dean Bradley Osborne, that aims to capitalize on customers' frustrations with Wall Street, the Journal and others report. The firm "plans to hire aggressively, not only from Morgan Stanley but from other Wall Street banks," the FT says. "DBO, like other advisory firms such as Lazard and Greenhill, hopes to take business away from Wall Street banks that are vulnerable to conflicts of interest concerns when they offer high-paying equity and debt financing services at the same time as providing an advisory role," the FT says.
Baklava Break: Coverage of the Greek crisis was relatively light today. Angela Merkel, the German chancellor, insisted on Wednesday that there is no need to increase the size of the European firewall against the spread of the Greek debt crisis. The International Monetary Fund, the Obama administration and others think otherwise. Separately, the head of Germany's manufacturers' association, proposed a new Marshall Plan to save Greece. Meanwhile, the European Commission predicted the EU will fall back into recession, the Journal reports today.
Privacy Makes a Comeback: Scan thought the privacy debate was dead in the era of social media, but perhaps not so.
A coalition of Internet giants including Google Inc. has agreed to support a do-not-track button to be embedded in most Web browsers—a move that the industry had been resisting for more than a year, the Journal reports. There are some exceptions.
Broader reforms will require legislation, something that is unlikely to occur this year, the Times reports.
Separately, under pressure from California Attorney General Kamala D. Harris, six of the largest mobile device companies — including Apple and Google — said they would begin asking app developers who collect personal information to include privacy policies with the apps. This deal, too, has limitations.
Wall Street Journal
The tying debate is also back, and its timing is poor considering the selling of multiple services to business customers is a major ingredient of the recovery recipe for banks. The initial public offerings of Facebook and other tech companies have raised the question again whether it is appropriate for lenders to businesses to also underwrite their stock offerings.
More reasons for bankers to go back to bed … A Journal story revisits the litany of reasons — stress tests, Consumer Financial Protection Bureau scrutiny, the Durbin Amendment and tougher risk management measures — why smaller banks are reluctant to exceed the $10 billion asset mark. The story quotes bankers who said they discouraged business or backed off a deal to stay small.
Customers who received department-store gift cards, frequent-flier miles or the proverbial toaster as an incentive to open bank accounts may have to pay taxes on those gifts. HSBC, Citigroup and the Citizens Bank unit of Royal Bank of Scotland PLC each mailed IRS form 1099 to thousands of customers who accepted such deals last year, the Journal reports.
New York Times
Propublica says bank lobbyists couldn't kill the Volcker rule but instead are getting Congress and regulators to render it "morbidly obese and bedridden."
Experts debate whether a bankruptcy-style process will really work for big financial institutions.
The former chief executive and former chairman of the failed Icelandic lender Kaupthing Bank were indicted on Wednesday on charges of fraud and market manipulation.
Washington Post
Federal regulators have authorized nearly $100 million in payments to cover the legal costs of three former Fannie Mae executives, including more than $37 million since the government seized the firms more than three years ago.
