Give me a break: Kautter highlights student tax breaks to the WSJ
Students and universities around the country and the world are gearing up for college application season, and with the still-recovering economy playing a heavy hand in who can afford to go, the Wall Street Journal sought some tax tips from David Kautter, executive-in-residence and managing director of the Kogod Tax Center. "Many of our students are older and already working, but have gone as far as they can with existing skills," Kautter states in the article. With everyone heading back to school and the costs of education still rising, the Journal and Kautter laid out some of the top tax break options for students to investigate as they file. View full article here (10/29/2011)
The Daily Caller turns to Waldman on the national debt
As of Oct. 31, 2011, the U.S.’ total debt surpassed the country’s gross domestic product (GDP) for the first time since WWII, according to the Daily Caller. The publication interviewed Executive-in-Residence Mark Waldman about surpassing this ominous landmark. “It’s not as if there’s some big switch in the Treasury Department that flipped when that happened, but the world notices, and it makes the world less willing to purchase our securities at existing interest rates,” Waldman stated in the story. “The bottom line is, it’s possible our debt problem has passed the point of no return, given the political realities.” View full article here (10/28/11)
Lumsdaine discusses MetLife’s future in online op-ed
As MetLife, a Fortune 500 company, faces some difficult business decisions and tough regulations, Professor Robin Lumsdaine urged readers in an op-ed on AmericanBanker.com to consider one important issue: do the best interests of a company align with the best interests of consumers?
MetLife, which doubles as an insurance provider and a bank holding company, straddles a difficult world of regulatory balance. It is the seventh-largest bank holding company with some tremendous assets. But stringent regulations have led many companies to reconsider their business mix, and MetLife appears ready to do the same.
“In the past year, MetLife has additionally decided to seek buyers for the depository and forward mortgage businesses of its banking subsidiary, MetLife Bank (MetLife has said it plans to retain its reverse mortgage business). And it is seeking to deregister as a bank holding company, underscoring the regulatory challenges to its business,” Lumsdaine writes in the piece. “Yet one can assume from its exit plan that the impetus for MetLife to become a bank holding company more than a decade ago has evaporated.”
This desire to shift to the “shadow financial sector,” as described by Lumsdaine, can make consumers nervous and affect the overall balance of the system considering MetLife’s size and importance.
“The recent global financial crisis reminded us all of the importance of stringent capital regulations for safeguarding financial institutions, given the important role such institutions have in the global economy. In attempting to prevent unbridled risk-taking, regulatory capital policy must take care not to inhibit risk-mitigation or drive systemically-important institutions away from supervisory oversight," she wrote.
Lumsdaine concludes with an answer to her opening question: “From a systemic perspective, we'd all probably be better off if MetLife remained a bank holding company. From a business perspective, it is understandable why it might prefer not to be.” Lumsdaine serves as Crown Prince of Bahrain Professor of International Finance at Kogod. View full article here (10/28/11)
Carberry clears the air around Cain’s new campaign video
A new campaign video by republican presidential candidate Herman Cain is creating a stir. Featuring Cain’s chief of staff, the advertisement shows the high-profile staffer inhaling from a cigarette and blowing it at the screen. The Washington Post turned to executive-in-residence Michael Carberry for his opinion on the message behind the ad. Carberry thought the video sought to grab attention. “Perhaps it’s just so different that it’s an attempt to break through the clutter. It certainly stands out," he said. View full article here (10/26/11)
Business blog and Kautter praise new IRS notification plan
The Wall Street Journal’s “Total Return” blog highlighted a new program by the IRS to notify taxpayers of issues in their filings before an audit even hits the table. David Kautter, executive-in-residence and managing director of the Kogod Tax Center, was cited with positive things to say of the program, which would encourage self-correction and likely decrease the chances for being audited. “This is an excellent, concrete way to educate taxpayers,” Kautter stated in the piece. “Even if the IRS is wrong, the sooner we know about a perceived problem, the faster we can deal with it. And if there is a problem, settling it sooner will stop the interest clock running.” View full article here (10/26/11)
Sicina discusses the problems faced by Birmingham banks in local publication
Executive-in-Residence Robert Sicina was interviewed in a local publication regarding a growing problem for banks in the Birmingham metro-area in Alabama. The Birmingham Business Journal found that more than half of the banks in the area had a higher-than-average troubled asset ratio. A troubled asset ratio, according to the Journal, “is derived by adding the amounts of loans past due 90 days or more, loans in non-accrual status and other real estate owned (primarily properties obtained through foreclosure) and dividing that amount by the bank’s capital and loan loss reserves.” Sicina was cited discussing other factors in a high troubled asset ratio, as well as what this means for the banks affected by the problem. “When banks start approaching ratios of 100 percent, that’s when you have to start wondering if the owners have access to fresh capital, so they can lower that ratio,” he said. “If the bank can’t get fresh capital, it could be in a downward spiral and headed into the arms of the government.” View full article here (10/14/11)
Bloomberg examines Cain’s 9-9-9 plan with help from resident tax expert
In recent polls of the GOP candidates, Herman Cain has kept popping up near the top – perhaps in no small part a result of his 9-9-9 tax code plan. This proposal, which Cain claims will “level the field,” would include a nine percent tax on sales, corporate income, and individual income. Bloomberg decided to check Cain’s math for the final revenue, and sought the help of David Kautter, executive-in-residence and managing director of the Kogod Tax Center. Kautter prefaced that available information about the plan – such as what exemptions will exist – is lacking, and makes a precise calculation impossible. “The revenue estimate is largely dependent on the rate and what’s subject to tax,” he states in the article. “When you pull out housing, clothing and food, the amount you raise drops by a lot.” Does the math add up? View full article here (10/05/2011)
The Atlantic highlights cover story from the newest issue of Kogod Now
In an attempt to draw further attention to the effects of marketing on childhood obesity, The Atlantic listed the newest research on the subject. At the top of the list was the cover story of the fall issue of Kogod Now. This cover story discussed the research projects of associate professor Sonya Grier, professor Manoj Hastak, assistant professor Wendy Boland, and associate professor Anusree Mitra; the topics of the studies all connect to nutrition and marketing. The author of The Atlantic story, a professor from New York University, says the piece from Kogod Now takes “a tough look at how targeted marketing of foods and beverages contributes to the obesity crisis, especially among minority children and adolescents.” View full article here (10/05/11)
Advice for the unemployed: Kautter discusses consulting on Fox News
Fox News interviewed David Kautter, executive-in-residence and managing director of the Kogod Tax Center, on their “America’s News HQ” program regarding his number one tip for job seekers in today’s difficult economy. After being cited in the Wall Street Journal last month on the subject, Fox sought to talk in-depth with Kautter about starting independent consulting firms as a way for job seekers to make better use of the tax code. “If you set up your own consulting business, you’re allowed to deduct expenses that you would otherwise be limited in deducting were you not self-employed,” Kautter said on the program. “There’s certain job hunting expenses that are deductible under the internal revenue code… If you’re an employee or former employee and have not become an independent contractor, your ability to deduct those job hunting expenses is limited to the extent that they exceed 2% of your adjusted gross income.” He went on to explain some additional perks, as well as to discuss the chances of the IRS challenging the independent consulting status. View full clip here (10/03/11)