Economy | AccountingWEB


Greenspan Upbeat About Economy; Economists Debate his Legacy

Most consumers know full well that they should put more money in the bank and less debt on their credit cards, and economists say the spending spree cannot last.In fact, they say high consumer spending is a direct result of policies implemented by the Federal Reserve in response to the bursting tech bubble of 2000.
Education & Careers

More Teens than Jobs Again This Summer

Employment rates for individuals under the age of 20 in America hit a historic low last year. This year is not expected to be much better. Summer employment, once the private reserve of students and teachers, has, in recent years, seen an influx of both young adults (age 20-24) and seniors, battling a tight job market, pension reductions and layoffs.

Income, Saving, & Confidence All Play Role in Economic Growth

April saw personal incomes increase at the fastest pace this year. The Commerce Department’s Bureau of Economic Analysis announced on Friday, May 27, that personal incomes increased $69.1 billion or 0.7 percent and disposable personal income (DPI) increased $45.7 billion or 0.5 percent. Disposable personal income is the amount of income remaining after taxes are paid.Personal consumption expenditures (PCE), often called consumer spending, increased $53.6 billion or 0.6 percent which was less than the 0.8 percent rise expected by economists surveyed by MarketWatch.
Education & Careers

Federal Reserve Board: The Next Generation

If President Bush is having trouble finding someone to fill Alan Greenspan’s shoes as Chairman of the Federal Reserve, he might want to extend his search to students at Pittsford Mendon High School in Rochester, New York. They even have experience in the job, having won the 10th Annual Fed Challenge.The Fed Challenge is an academic competition providing high school students an insider’s view of how the Fed makes monetary policy.

Mixed Forecasts for U.S. Economy

Economists see reduced growth in the US economy according to the Wall Street Journal’s online forecasting survey for May. They are predicting the slowdown will continue in the second quarter but rebound in the third and fourth quarters of 2005. Economists cut their expectations for annual growth to 3.2% from the 3.7% forecast in last month’s survey. This follows a 3.1% actual growth rate for the first quarter of 2005. The growth rate for the same quarter in 2004 was 4.4%. Rising energy costs in the opening quarter are blamed for the decline.

Analyst Predicts Stock Market Won't Take Annual April Dip

April is often a rough month for the stock market as Americans reach into their pockets-and their portfolios-to pay the taxman, but one analyst says that trend may be offset by higher-than-expected withholding rates, MarketWatch reported.Mark Hulbert, the founder of Hulbert Financial Digest in Annandale, VA, has been tracking the advice of more than 160 financial newsletters since 1980. In his MarketWatch column, Hulbert quoted Madeline Schnapp, a senior research analyst at TrimTabs Investment Research and editor of two of that firm's newsletters, TrimTabs Personal Income and TrimTabs U.S.

NJ, IRS Say Trump Casino Reorganization Unacceptable

State and federal tax authorities are opposed to the way Donald Trump plans to pay $53 million in back taxes when his casino company emerges from bankruptcy.Both the Internal Revenue Service and the New Jersey Division of Taxation filed motions in U.S. Bankruptcy Court objecting to Trump's plan to pay back taxes, the Associated Press reported.Trump Hotels & Casino Resorts, which filed for Chapter 11 in November, owes $11.6 million to New Jersey and $42 million to the IRS for back taxes on three Atlantic City casino hotels and a Gary, Ind., riverboat.

FDIC Wants Banks to Notify Customers of Identity Theft

On Friday, March 18, 2005, regulators at the Federal Deposit Insurance Corp. (FDIC) voted 5-0 to approve a ruling that would force U.S.

Study: Retirees Would Get Less Money Under Bush Plan

Most workers who choose the “default” investment option under President Bush's plan for Social Security personal accounts would do better under the existing system.That's according to Yale University finance economist Robert J. Shiller, who has concluded that nearly three-quarters of workers who opt for the “default” life-cycle accounts, which automatically make investments more conservative over time, would do worse than the traditional system 71 percent of the time, The Washington Post reported.The 71 percent figure is based on global rates of return.

Tax Tip: Refinancing Your Home

Taxpayers who refinanced their homes may be eligible to deduct some costs associated with their loans.Generally, for taxpayers who itemize, the “points” paid to obtain a home mortgage may be deductible as mortgage interest. Points paid to obtain an original home mortgage can be, depending on circumstances, fully deductible in the year paid.

Apple Plans to Boost Executive Compensation Through Bonuses

As Apple broadens distribution of its wildly popular iPod music players to retail outlets like Target, the company is making plans to offer cash bonuses to top managers, Bloomberg News reported.Citing a study Apple commissioned, the company said it is not paying its executives enough and is not positioned to be competitive in the area of executive pay with rivals such as Dell and Sony, both of which are trying to copy the success of the iPod. The iPod has fuelled the company's shares, which have more than tripled in the past year.

Women Sue Small Business Administration Over Missed Goals

Upon viewing the disturbing results of a recent U.S. Women's Chamber of Commerce national survey of women business owners which found a remarkable 62 percent unable to access capital they need to be competitive -- despite their preparedness and available collateral --, the leaders of the USWCC decided to take dramatic action.To significantly increase access to capital for the more than 10 million women-owned businesses in the U.S., the USWCC announced a groundbreaking partnership with Newtek Small Business Finance.

SEC Extends Time for Banks to Comply with Gramm-Leach-Bailey Act

The Securities and Exchange Commission announced on Tuesday that it issued an order further extending until Sept. 30, 2005, the compliance dates for banks with respect to certain broker registration requirements contained in the Gramm-Leach-Bliley Act (GLBA). The Commission does not expect banks to develop compliance systems to meet the terms of the "broker" exceptions until the Commission amends its rules.

SEC Boss Chastises Attorneys Over Fund Scandal

Securities and Exchange Commission Chairman William H.

AICPA Issues Report on Social Security Reform

The American Institute of Certified Public Accountants (AICPA) released this week a comprehensive analysis of the factors that should be considered for Social Security reform. The intent of this publication is to provide a tool that will aid in this important debate. The goal of the report is to provide unbiased facts on the degree of the Social Security program’s financial problem and the impacts on the economy and society.

Reducing Marginal Tax Rates Increases Entrepreneurship, Study Shows

Reducing marginal income tax rates on entrepreneurs increases entrepreneurial entry, decreases exit from entrepreneurship, and lengthens the duration of entrepreneurial ventures, according to a study released last week by the Office of Advocacy of the U.S. Small Business Administration."This study shows how tax rates directly impact entrepreneurship," said Thomas M. Sullivan, Chief Counsel for Advocacy. "Reducing marginal tax rates on entrepreneurial income provides a clear incentive for entrepreneurial activity.

Sen. Hagel Proposes Alternate Social Security Plan

Senator Chuck Hagel, a Nebraska Republican, has proposed his own fix for Social Security, which would include increasing the retirement age to 68 years old, the Associated Press reported.Hagel's plan was unveiled Monday and includes a provision to allow younger workers to divert some funds to personal investment plans. The plan is based partially on life expectancy."This reality is daunting, but there is good news in all of this. The system can be fixed. It is within our power to preserve the social safety net of this nation," said Sen.

GOP Proposes Big Tax Relief for U.S. Businesses

Senate debate continues today on a proposal to offer $4.2 billion in tax relief for U.S. businesses to lighten the burden of a higher minimum wage.The proposal, offered by Sen. Rick Santorum, R-Pa., calls for tax breaks and regulatory relief combined with raising the minimum wage by $1.10 to $6.25 per hour over 18 months, according to Dow Jones Newswires, quoting Senate aides.Santorum's plan counters a proposal by Sen.

Greenspan Calls for Simpler Tax Code

Calling the existing U.S. tax code overly complex with an "overlapping web of deductions and exemptions, " Federal Reserve Chairman Alan Greenspan suggested a consumption tax could spur more personal savings and economic growth.Greenspan spoke Thursday before an advisory panel on tax reform appointed by President Bush. He referred to the last tax code overhaul in 1986."Changes since the 1986 act have been largely incremental without the appropriate all-encompassing context that broad reform brings to the table," Greenspan told the group, according to The New York Times.

AICPA Seeks Comments on Proposed Practice Aid for Mortgage Bankers

The American Institute of Certified Public Accountants (AICPA) has issued a proposed practice aid for entities engaged in mortgage banking activities and is seeking comments on the draft document. The practice aid is entitled Derivative Loan Commitments Task Force Illustrative Disclosures on Derivative Loan Commitments and is intended to be used by both U.S. Securities and Exchange Commission (SEC) registrants and non-registrants. The practice aid includes examples of illustrative disclosures for each of the requirements cited in SEC Staff Accounting Bulletin (SAB) No.


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