11/2/2012 7:15 PM ET|
GOP Senate would change investing
It's still a big 'if,' but if Republicans capture the upper chamber in Tuesday's election, investors can say farewell to recent financial reforms and expect big changes in tax law.
Bye-bye, Dodd-Frank. Hello, comprehensive tax reform.
An attack on financial regulations and a new push to overhaul the U.S. tax code are just two things analysts expect to see next year if Republicans take the Senate in Tuesday's elections. At this point, that's a big "if" -- the GOP needs to gain four seats for a majority if President Barack Obama is re-elected, and three if Mitt Romney is chosen. Predictions range from no net change to Republicans adding four seats, so the battle for control is about as tight as the presidential race.
Here is a look at three committees important to investors and how they'd change if Republicans reclaim the upper chamber.
This committee and its chairman-in-waiting Richard Shelby, R-Ala., would play a big role in throwing out some of the Dodd-Frank rules on Wall Street, one of Romney's stated goals.
Shelby made that crystal clear last summer when he said in a speech: "I will introduce legislation to repeal Dodd-Frank provisions that had absolutely nothing to do with the financial crisis and any provisions that are imposing unnecessary costs on our economy."
Shelby, 78, chaired the panel from 2003 to 2007 and was first elected to the Senate in 1986. Shelby, who tried to push tighter rules on Fannie Mae and Freddie Mac through the Senate when he was chair, can be expected to hold comprehensive hearings on the broader U.S. housing finance system if he holds the gavel again come January.
The banking industry says that a thorough review of the Dodd-Frank law should happen even if Democrats retain control of the Senate.
"Regardless of who's in the chair, that review needs to take place," says James Ballentine, chief lobbyist of the American Bankers Association. Ballentine expects Shelby to stick to his goals, including whittling down Dodd-Frank and putting a board, rather than a single individual, in charge of the Consumer Financial Protection Bureau in an attempt to make it more accountable.
With the retirements of Senators Kay Bailey Hutchison, R-Texas, and Olympia Snowe, R-Maine, Tea Party favorite Jim DeMint of South Carolina becomes next in line to chair the Senate Commerce, Science and Transportation Committee -- a panel with a jurisdiction as broad as its name suggests.
Everything from interstate commerce to regulation of commerce to regulation of consumer products to transportation falls under the purview of the Commerce Committee, a panel now headed by Sen. John Rockefeller, D-W.V.
DeMint has stated in published interviews that he will seek to limit what he believes are duplicative highway programs, shrink the U.S. Commerce Department and overhaul broadcasting regulations if he becomes chair.
The senator, first elected in 2004, clearly favors aggressive deregulation and would offer a hands-off policy to the technology sector, for example.
"Bureaucratic regulators in the federal government will never be able to predict or direct where technology is headed and will only continue to stifle pioneering innovation as they look to regulate developing industries," DeMint's website says.
DeMint's staunch conservatism could be a stumbling block to forging consensus with panel Democrats -- though he has a friendly relationship with Rockefeller.
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Provided he doesn't lose his own election for a seventh term -- a virtual certainty -- Sen. Orrin Hatch, R-Utah, would chair the Senate Finance Committee in the event that the GOP takes the Senate.
Hatch has said that the prospect of chairing the committee, which deals with taxes and trade agreements, is one of the main reasons he is running again. "It is the most powerful committee in Congress," Hatch said at a debate with his Democratic challenger Scott Howell in October. "If we're going to solve the problems in this country, it's going to be that committee that does that."
High on Hatch's to-do list would be comprehensive tax reform, something Scott Hodge, the president of the Tax Foundation, says Hatch is well prepared to move forward.
Business groups and both Obama and Romney are pushing for an overhaul of the tax code, and Hodge says Hatch would be more effective than current Chairman Max Baucus, D-Mont., at shepherding a big-picture reform of individual and corporate taxes through the panel.
"He can break the logjam," said Hodge, whose organization advocates lower rates and fewer tax preferences. Hatch says he is committed to a "complete overhaul" of the tax system that would simplify the tax code and encourage investment and savings. A Hatch chairmanship would mean, among other things, efforts at stopping any federal tax increases -- one bullet point from his campaign literature.
Hatch's other goals for the finance committee include repealing Obama's health-care reforms and pushing through a balanced budget amendment, two proposals he shares with Romney.
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VIDEO ON MSN MONEY
A comprehensive overhaul...yeah...that favors them!
FIRE CONGRESS!!!!....YOU...America...you are the ones that have given Congress the lowest approval rating in, what, 100 years?
So do somethng about it!...stop being sheep...simply do not put a vote in for any INCUMBENT on the ballot...if you must stick to party lines thats fine...just simply put in a NEW Democrat or Republican of your choice....
Fail to do this and you just give them automony to do what they do best...NOTHING and ONLY FOR THEMSELVES!
""Regardless of who's in the chair, that review needs to take place," says James Ballentine, chief lobbyist of the American Bankers Association. "
Would you trust a lobbyist for the banks? If so.....why?
We are very likely in for more hard times at best and total financial collapse at the worst. Maybe we should hasten the process and allow the financial district to screw us one more time before that happens. How short is the memory of the American public? Have we forgotten how we got into this mess when banks reaped huge fees while the bill was paid for, and is still being paid for, by the taxpayers. Low interest rates sound great unless you are dependent on safe, fixed income products like Treasury Bills which used to yield 5-6% and now yield less than 1%. That means that for many people their income has been cut by 80% or more.
Do not believe the GOP crooks. Romney tells one group how is doesn't care about those 47% who consider themselves victims. Then Romney gets up there and talks about veterans and minorities like he is their best friend. That is just incredible to me. How dumb does he think we are?
Yes, Romney is business savvy. He's made millions off of his business investments. Except...he's never once built and created his own, he's just invested in them. That's what a venture capitalist is...someone who takes money and profits off the hard work and ideas of others.
But tell us, how many of his employees did he make rich? 2%?
How many jobs did he outsource?
How many businesses did he bankrupt for profit?
Did he run these businesses for what was best for the workers or what was best for him and his fellow investors?
How many companies did he run that paid most their workers a good wage, provided great benefits and put workers lives first....not profits?
How many people reading this would like the CEO of their employer to run their lives? Do you go to work thinking that your executives are geniuses? That they're in touch with what goes on in the workplace? That they get what's really going on?
Or do you think they're out of touch? That they only do what's best for them? That they don't know what the hell's really going on?
Then tell us again about how we need a CEO to run this country...
If Transportation falls under the purview of the Commerce Committee then the same Senators who blocked the Transportation Infrastructure Development funding to create american jobs will be running the show in the congress. We still have millions of american jobs that are lost due to not having a six year transportation reauthorization so projects can not be planned and funded for long term economic growth affecting many public agencies of 50 states. When you vote on Tuesday, please keep this in mind. Already GOP highway commissioners are leaving their guranteed bi weekly pay checks to take private sector jobs! ahead of the elections.
Think about american jobs, economic growth, creating infrastructure sector jobs, jobs for better qualified american engineers now cleaning toilets for a living!! Its time to see the reality and do the right thing to keep up with the developing world. Our Transportation Infrastructure is over 56 years old.
Great article advising changes to come, if GOP Baggers to take upper hand over the US Senate :(
I would love it if everyone paid the same percent on their taxes.
You would be taxed on how much you spend.
"GOP- The inventors of naked shorting and abolishers of the uptick rule. Yeah, they are real friends of honest investors."
You forgot-- Derivatives and Debt Contracts from the Federal Reserve that yield at higher rates than the money borrowed. Banks MAKE MONEY by digging us deeper. Ratio of Super PAC dollars to each of the candidates? In favor of Romney nearly 4 to 1. The GOP has ZERO interest in helping us. Destroy Dodd Frank and we get more of what Gramm Leach Bliley did... legalize financial sector collusion and wipe out Glass Steagall... the ONLY Act to help America for decades by segregating money touchers.
I live in DeMint's district.We never see or hear anything about him except that he wrote a book about the tea party on our dime.My letters to him are answered with am I a Mr. or Mrs.an then nothing else.
I read that he takes in millions from lawyers,big oil and insurance companies.He had over 11 million on hand at the time. A one term law is the only way to replace him with someone more accountable
Apple Inc. paid an income tax rate of only 1.9 percent on its earnings outside the U.S. in its latest fiscal year, a regulatory filing by the company shows.
The world's most valuable company paid $713 million in tax on foreign earnings of $36.8 billion in the fiscal year ended Sept. 29, according to the financial statement filed on Oct. 31. The foreign earnings were up 53 percent from fiscal 2011, when Apple earned $24 billion outside the U.S. and paid income tax of 2.5 percent on it.
The tech giant's foreign tax rate compares with the general U.S. corporate tax rate of 35 percent.
Apple may pay some income taxes on its profit to the country in which it sells its products, but it minimizes them by using various accounting moves to shift profits to countries with low tax rates. For example the strategy known as "Double Irish With a Dutch Sandwich," routes profits through Irish and Dutch subsidiaries and then to the Caribbean.
Other multinational corporations also use such tax techniques, which are legal.
Like other big companies, Apple leaves cash overseas. If it brought it home to the U.S., it would have to pay U.S. corporate taxes on the money. The cash that Apple has left overseas as of Sept. 29 has mounted to a stunning $82.6 billion, up from $74 billion as of June 30.
Where Apple does differ from other companies is that it sets aside a portion of the foreign profits, marking them as subject to U.S. taxes sometime in the future.
When Apple reports quarterly results, it records that portion of the taxes as a liability, which is subtracted from its profits even though it hasn't actually paid the taxes.
Tax experts say the company could easily eliminate these "phantom" tax obligations. That would boost Apple's profits for the past three years by as much $10.5 billion, according to calculations by The Associated Press reported in July.
While investors might rejoice if Apple suddenly added $10.5 billion to its profits, unilaterally erasing a massive U.S. tax obligation could tarni**** reputation as a relatively responsible payer of U.S. taxes. Instead, the company is lobbying to change U.S. law so that it can erase its liabilities in a less conspicuous fashion.
Overall Cupertino, Calif.-based Apple had net income of $41.7 billion, or $44.15 per share, in fiscal 2012. That was up 61 percent from $25.9 billion, or $27.68 per share, in fiscal 2011
If this doesn't make every person drawing a paycheck that pays 25 to 30% tax mad, nothing will. This has to be changed. I am not going to pay more in tax so these billion dollar business can pay nothing in tax.
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