October 26, 2011

ECONOMIC OPTIMISM IN UTAH OUTPERFORMS THE NATIONAL AVERAGE

Utah Business
In October, on a seasonally adjusted basis, the Zions Bank Utah Consumer Attitude Index (CAI) decreased to 68.1, a decrease of 2.5 points compared to September 2011.

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DEFENSE, AEROSPACE INDUSTRIES: US WILL LOSE ONE MILLION JOBS IF AUTOMATIC CUTS ARE ENACTED
Bloomberg News
"The defense and aerospace industries are warning that the US will lose 1 million jobs and $59.4 billion in wages and salaries tied to...their businesses if Congress' supercommittee fails and automatic cuts are imposed." According to the article, this report from the Aerospace Industries Association will be the basis for its lobbying campaign. This "analysis lumped together the impact of the $450 billion in cuts already planned plus the additional $500 billion that may be imposed. The report didn't break out the incremental impact of the two elements, according to a summary of the findings."

U.S. GOODS ORDERS DROP
Quick Manufacturing News
However, excluding the aeronautics-dominated transportation sector, new orders rose 1.7% in the month. Click to continue

RETAIL TRAFFIC STILL SLOW, BUT SHOULD PICK UP SOMEWHAT THIS MONTH
Quick Manufacturing News
Import cargo volume at the nation's major retail container ports is expected to increase 2.6% in October over the same month last year and should reach its highest level of the year as retailers stock up for the holiday season. Click to continue

U.S. STEEL PRODUCERS BRACE FOR TOUGH YEAR AHEAD AS RAW MATERIALS PRICES, CAPACITY INCREASE
Quick Manufacturing News
Companies report improved results in the third quarter but expect higher costs and lower margins. Click to continue

HOW AMERICA CAN FIGHT BACK AGAINST LOW-COST LABOR IN CHINA
Quick Manufacturing News
The Harada Method promises to create workers who are masters of their positions and champions of continuous improvement -- at little to no cost. Click to continue

CHIEF HOUSE TAX WRITER UNVEILS TERRITORIAL TAX SYSTEM: UPDATE AND ACTION ITEM
Dorothy Coleman, NAM
As part of the House Ways and Means Committee's overall effort on tax reform, Chairman Dave Camp (R-MI) today released a draft, revenue-neutral proposal that would reform the international tax system by moving from a worldwide to a territorial tax system. In particular, the proposal would:

• Generally exempt 95 percent of foreign-source income from U.S. tax, lowering the effective U.S. tax rate on most foreign dividends to 1.25% ;

• Include anti-deferral rules ("subpart F") to immediately and fully tax domestic companies on the passive income of foreign companies;

• Include "thin capitalization" rules to prevent U.S. companies from borrowing heavily in the United States to finance income from overseas operations and

• Limit income shifting to prevent U.S. companies from avoiding U.S. tax by transferring highly valuable intangible property to foreign companies that pay little or no tax; and

• Continue to provide foreign tax credits to mitigate double taxation of non-exempt foreign income – such as passive income and royalties.

Under transition rules in the proposal, pre-effective date, tax-deferred foreign earnings of would be taxed once at a low tax rate (similar to a repatriation holiday). U.S. companies could pay this tax over eight years, and these earnings could then be brought back to the United States under the exemption system.

In a press release, Chairman Camp said that today's draft was part of the Committee's broader effort on comprehensive tax reform that would lower the top tax rates for individuals and companies to 25 percent. Rep. Camp also said that the Committee will unveil base-broadening measures to replace the revenue from reducing the corporate tax rate at a later date.

Committee Resources:

Please click here for additional information about the proposal, including a copy of the discussion draft, a section by section analysis, and a summary of the proposal.