Corporate tax rate overhaul may be part of a 'fiscal cliff' deal

WASHINGTON — Amid the wrangling over the so-called fiscal cliff, President Obama and congressional Republicans can agree on something: They want to lower the corporate tax rate.

The U.S. has the highest overall rate of any of the world's developed economies. It took the top spot in March after Japan reduced its rate, mimicking other countries that have lowered taxes to lure new businesses and keep existing companies from leaving.

Negotiations to avert automatic income tax increases and federal spending cuts scheduled to kick in Jan. 1 could provide the impetus for U.S. policymakers to tackle an overhaul of the corporate tax code next year.

The White House wants to put a corporate tax overhaul, along with changes to the individual income tax system, on a fast track as part of any deal to avoid the "fiscal cliff."

The centerpiece of an overhaul would be slashing the 35% corporate tax rate, a goal long sought by corporate executives and lobbyists.

Quiz: How much do you know about the 'fiscal cliff'?

"In the name of global competitiveness, I think that has largely been agreed to," Jim McNerney, chief executive of Boeing Co., said about how both parties view the need for major corporate tax changes.

In February, Obama proposed lowering the federal rate to 25% for manufacturing companies and to 28% for other firms. Rep. Dave Camp (R-Mich.), chairman of the House Ways and Means Committee, has been pushing a plan to lower the rate to 25% for all corporations.

In both cases, the rate cuts would be accompanied by the elimination of some of the numerous tax breaks that allow many companies to pay a much lower effective tax rate — and sometimes to avoid paying any corporate taxes at all.

"The administration's position on this is very much in sync with what Republicans say they want, which is a lower rate and a broader base," said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and the former chief economist for Vice President Joe Biden.

But there still are some obstacles to a deal.

Some Democrats want to use an overhaul to increase the amount of tax revenue coming from corporations, while Republicans want to keep the amount the same. The White House and congressional Republicans also differ on how the U.S. should treat money earned abroad.

And the business community itself is divided. Many small companies file taxes as individuals. They're opposed to any "fiscal cliff" deal that would raise their rates while giving corporations a rate reduction.

Analysts said the obstacles could be overcome because there is consensus around the broader point that the U.S. needs to bring its corporate tax rate in line with other developed nations.

"Regardless of your political persuasion, it is unquestionably the case that the nominal U.S. corporate tax rate is much higher than that of peer countries," said Edward Kleinbard, a USC law professor and former chief of staff of Congress' Joint Committee on Taxation.

The case for corporate tax reform got a boost when the overall U.S. rate of 39.1%, which includes federal, state and local corporate taxes, became the highest this year among the 34 nations in the Organization for Economic Cooperation and Development. Two decades ago, the U.S. was 13th.

"At one time in the '80s, we had a competitive corporate tax rate," said Dorothy Coleman, vice president of tax and domestic economic policy for the National Assn. of Manufacturers. "We've fallen behind by standing still."

Quiz: The year in business

But the rate in the tax code isn't what many companies pay because of a host of deductions and tax credits. In 2011, the effective corporate tax rate in the U.S. was 29.2%, roughly in line with the 31.9% average of the six other largest developed economies, the Obama administration said.

The White House said that parity does not mean the statutory rate shouldn't be reduced. It simply means that many tax breaks should be eliminated, allowing the rate to be lowered without adding to the deficit.

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Four firefighters shot, two fatally, in western New York

WEBSTER, N.Y. -- A western New York police chief says a gunman who entrapped and shot four volunteer firefighters outside a blazing home is dead.

Webster Police Chief Gerald Pickering says two of the firefighters were killed and two others hospitalized after the ambush on a spit of land on Lake Ontario just northeast of Rochester.

He also says an off-duty police officer who was driving by has injuries from shrapnel. One of the slain firefighters is also a town police lieutenant.

The shooting Monday morning happened in a quiet neighborhood of seasonal and year-round homes.

The West Webster Fire District received a report of a car and house on fire on Lake Road, on a narrow peninsula where Irondequoit Bay meets Lake Ontario, Flynn said.

"When they got there, they started to take on rounds and the initial responders were struck," the sheriff said.

The two wounded firefighters were in critical condition at a Rochester hospital, Flynn said.

The fire appeared from a distance as a pulsating ball of flame glowing against the early morning sky, flames licking into treetops and reflecting on the water, with huge bursts of smoke billowing away in a brisk wind.

Police say four homes in all were destroyed and four damaged by the spreading flames.

Webster, a middle-class, lakeside suburb, now is the scene of violence linked to house fires for two Decembers in a row.

Authorities say that on Dec. 7, 2011,  a 15-year-old boy doused his home with gasoline and set it ablaze, killing his father and two brothers, 16 and 12. His mother and 13-year-old sister escaped with injuries. He is being prosecuted as an adult.

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British retailers start online sales early

LONDON (Reuters) – British retailers have brought forward their Christmas clearance sales online in the hope that shoppers will log on to buy bargains and offset lackluster spending in stores.

Marks & Spencer launched its sale online at midday on Monday, it said on its website, while department store John Lewis said it would cut online prices when its stores close at 1700 GMT. Debenhams has already started its online sale.

Retailers in recent years have started sales online on Christmas Day, ahead of the clearances in stores from Boxing Day, but are increasingly launching their online offers before Christmas after delivery deadlines for the day have passed.

Hard-pressed shoppers have been leaving it later to buy presents in the hope that retailers would slash prices, the British Retail Consortium said.

It was forecasting that 5 billion pounds ($ 8.1 billion) would be spent in the shops on Saturday and Sunday combined, the last weekend before Christmas.

Richard Dodd, the BRC’s head of Media and Campaigns, said weekend trading had met expectations.

“Christmas, ultimately once all the final sums are done, will turn out to be acceptable but not exceptional,” he said.

He said the sector expected a modest increase in cash spending against a year go, but not necessarily any significant increase in real terms once inflation was stripped out.

Many British families‘ budgets are stretched, according to a survey from Markit that showed the biggest deterioration in household finances for seven months.

Analyst Howard Archer at IHS Global Insight said the weakening in household finances could not come at a worse time for retailers, and it highlighted why many people appeared to have been careful in their Christmas shopping this year.

“The suspicion has to be that consumers will be especially keen to take advantage of genuine major bargains in the sales to acquire items that they cannot otherwise afford or are reluctant to make at the moment,” he said.

“However, we suspect that people will likely to be more careful in buying – or reluctant to buy – items that they don’t really want or need in the sales.”

($ 1 = 0.6180 British pounds)

(Reporting by Paul Sandle; Editing by Louise Heavens)

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Thousands sign US petition to deport Piers Morgan

LONDON (AP) — Tens of thousands of people have signed a petition calling for British CNN host Piers Morgan to be deported from the U.S. over his gun control views.

Morgan has taken an aggressive stand for tighter U.S. gun laws in the wake of the Newtown, Connecticut, school shooting. Last week, he called a gun advocate appearing on his "Piers Morgan Tonight" show an "unbelievably stupid man."

Now, gun rights activists are fighting back. A petition created Dec. 21 on the White House e-petition website by a user in Texas accuses Morgan of engaging in a "hostile attack against the U.S. Constitution" by targeting the Second Amendment. It demands he be deported immediately for "exploiting his position as a national network television host to stage attacks against the rights of American citizens."

The petition has already hit the 25,000 signature threshold to get a White House response. By Monday, it had 31,813 signatures.

Morgan seemed unfazed — and even amused — by the movement.

In a series of Twitter messages, he alternately urged his followers to sign the petition and in response to one article about the petition said "bring it on" as he appeared to track the petition's progress.

"If I do get deported from America for wanting fewer gun murders, are there any other countries that will have me?" he wrote.

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Risks: Pedestrian Accidents More Deadly in Men

More than twice as many men as women die in pedestrian-vehicle accidents. Now researchers have partly determined why.

Writing online last month in the journal Injury Prevention, investigators considered the contribution of three factors: distance walked, number of accidents and fatalities per collision.

Researchers using data from a variety of sources found that men and women walk similar distances and that men are involved in slightly more accidents per mile. Only 1 percent of the difference in death rates is attributable to distance walked, they found, and 20 percent to an increased number of accidents among men.

The rest — 79 percent of the variation — owes to the fact that when there is a collision, men die at roughly twice the rate of women. According to the National Highway Traffic Safety Administration, 4,280 pedestrians died in traffic accidents in 2010, and 2,946 — 69 percent — were men.

Why? No one knows, but the lead author, Dr. Motao Zhu, an assistant professor of epidemiology at West Virginia University, suggested two possibilities: “Maybe males are more likely to cross roads with speed limits higher than 50 miles per hour,” he said. “Also, males may be more likely to be impaired by alcohol and drugs. Most people know it’s not safe to drive drunk, but it’s not safe to walk drunk either.”

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Raging fire guts Kabul market

KABUL, Afghanistan -- Firefighters battled through the night to contain a raging fire that swept through a market in the Afghan capital.

No injuries were reported, but the blaze destroyed hundreds of stores and millions of dollars worth of merchandise, Afghan police and firefighters said at the scene. 

Dealers at the neighboring currency exchange, the city’s largest, said they evacuated cash, computer equipment and records from their shops as the flames approached during the night. But in the morning, the market was jammed with people haggling over thick stacks of notes as smoke billowed overhead.

Col. Mohammed Qasem, general director of the Kabul fire department, said he suspected an electrical short was to blame for the fire. 

Gas canisters used to heat the stores propelled the flames, along with the cloth and clothing sold by many of the vendors, Qasem said. “It made it very big in a short time.”

Firefighters from the Afghan defense department and NATO forces were sent to assist. But the city’s notorious traffic and the market’s narrow lanes made it difficult for responders to maneuver their vehicles, Qasem said.

Abdulrahman, who like many Afghans has only one name, squatted near a fire truck with his head in his hands  as responders aimed a hose at the blackened ruins of a building still smoldering at noon Sunday, more than 12 hours after the fire broke out.

He said the building had contained three shops that he owned and a warehouse full of glassware, crockery and kitchen utensils. 

“I lost everything,” he said.

Shirali Khan complained that police hadn't allowed him to remove the goods from his four clothing stores.

“They thought we were all robbers,” he said.  “There’s only ashes left.”

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Special correspondent Hashmat Baktash contributed to this report.

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'Hobbit' extends No. 1 journey with $36.7 million

LOS ANGELES (AP) — Tiny hobbit Bilbo Baggins is running circles around some of the biggest names in Hollywood.

Peter Jackson's "The Hobbit: An Unexpected Journey" took in $36.7 million to remain No. 1 at the box office for the second-straight weekend, easily beating a rush of top-name holiday newcomers. Part one of Jackson's prelude to his "The Lord of the Rings" trilogy, the Warner Bros. release raised its domestic total to $149.9 million after 10 days.

Studio estimates Sunday put Tom Cruise's action thriller "Jack Reacher" in second place with a modest $15.6 million debut. Based on the Lee Child best-seller "One Shot," the Paramount Pictures release stars Cruise as a lone-wolf ex-military investigator tracking a sniper conspiracy.

Opening at No. 3 with $12 million was Judd Apatow's marital comedy "This Is 40," a Universal Pictures film featuring Paul Rudd and Leslie Mann reprising their roles from the director's 2007 hit "Knocked Up."

Paramount's road-trip romp "The Guilt Trip," featuring "Knocked Up" star Seth Rogen and Barbra Streisand, debuted weakly at No. 6 with $5.4 million over the weekend and $7.4 million since it opened Wednesday. Playing in narrower release, Paramount's acrobatic fantasy "Cirque du Soleil: Worlds Away" also drew light crowds, debuting at No. 11 with $2.1 million.

A 3-D version of Disney's 2001 animated blockbuster "Monsters, Inc." also had a modest start at No. 7 with $5 million over the weekend and $6.5 million since opening Wednesday.

In limited release, Kathryn Bigelow's Osama bin Laden manhunt saga "Zero Dark Thirty" played to packed houses with $410,000 in just five theaters, averaging a huge $82,000 a cinema.

That compares with a $4,654 average in 3,352 theaters for "Jack Reacher" and a $4,130 average in 2,913 cinemas for "This Is 40." ''The Guilt Trip" averaged $2,217 in 2,431 locations, "Monsters, Inc." averaged $1,925 in 2,618 cinemas and "Cirque du Soleil" did $2,542 in 840 theaters.

Since opening Wednesday, "Zero Dark Thirty" has taken in $639,000. Distributor Sony plans to expand the acclaimed film to nationwide release in January, amid film honors and nominations leading up to the Feb. 24 Academy Awards.

Opening in 15 theaters from Lionsgate banner Summit Entertainment, Naomi Watts and Ewan McGregor's tsunami-survival drama "The Impossible" took in $138,750 for an average of $9,250.

A fourth new release from Paramount, "The Sopranos" creator David Chase's 1960s rock 'n' roll tale "Not Fade Away," debuted with $19,000 in three theaters, averaging $6,333.

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Genetic Gamble : Drugs Aim to Make Several Types of Cancer Self-Destruct

C.J. Gunther for The New York Times

Dr. Donald Bergstrom is a cancer specialist at Sanofi, one of three companies working on a drug to restore a tendency of damaged cells to self-destruct.

For the first time ever, three pharmaceutical companies are poised to test whether new drugs can work against a wide range of cancers independently of where they originated — breast, prostate, liver, lung. The drugs go after an aberration involving a cancer gene fundamental to tumor growth. Many scientists see this as the beginning of a new genetic age in cancer research.

Great uncertainties remain, but such drugs could mean new treatments for rare, neglected cancers, as well as common ones. Merck, Roche and Sanofi are racing to develop their own versions of a drug they hope will restore a mechanism that normally makes badly damaged cells self-destruct and could potentially be used against half of all cancers.

No pharmaceutical company has ever conducted a major clinical trial of a drug in patients who have many different kinds of cancer, researchers and federal regulators say. “This is a taste of the future in cancer drug development,” said Dr. Otis Webb Brawley, the chief medical and scientific officer of the American Cancer Society. “I expect the organ from which the cancer came from will be less important in the future and the molecular target more important,” he added.

And this has major implications for cancer philanthropy, experts say. Advocacy groups should shift from fund-raising for particular cancers to pushing for research aimed at many kinds of cancer at once, Dr. Brawley said. John Walter, the chief executive officer of the Leukemia and Lymphoma Society, concurred, saying that by pooling forces “our strength can be leveraged.”

At the heart of this search for new cancer drugs are patients like Joe Bellino, who was a post office clerk until his cancer made him too sick to work. Seven years ago, he went into the hospital for hernia surgery, only to learn he had liposarcoma, a rare cancer of fat cells. A large tumor was wrapped around a cord that connects the testicle to the abdomen. “I was shocked,” he said in an interview this summer.

Companies have long ignored liposarcoma, seeing no market for drugs to treat a cancer that strikes so few. But it is ideal for testing Sanofi’s drug because the tumors nearly always have the exact genetic problem the drug was meant to attack — a fusion of two large proteins. If the drug works, it should bring these raging cancers to a halt. Then Sanofi would test the drug on a broad range of cancers with a similar genetic alteration. But if the drug fails against liposarcoma, Sanofi will reluctantly admit defeat.

“For us, this is a go/no-go situation,” said Laurent Debussche, a Sanofi scientist who leads the company’s research on the drug.

The genetic alteration the drug targets has tantalized researchers for decades. Normal healthy cells have a mechanism that tells them to die if their DNA is too badly damaged to repair. Cancer cells have grotesquely damaged DNA, so ordinarily they would self-destruct. A protein known as p53 that Dr. Gary Gilliland of Merck calls the cell’s angel of death normally sets things in motion. But cancer cells disable p53, either directly, with a mutation, or indirectly, by attaching the p53 protein to another cellular protein that blocks it. The dream of cancer researchers has long been to reanimate p53 in cancer cells so they will die on their own.

The p53 story began in earnest about 20 years ago. Excitement ran so high that, in 1993, Science magazine anointed it Molecule of the Year and put it on the cover. An editorial held out the possibility of “a cure of a terrible killer in the not too distant future.”

Companies began chasing a drug to restore p53 in cells where it was disabled by mutations. But while scientists know how to block genes, they have not figured out how to add or restore them. Researchers tried gene therapy, adding good copies of the p53 gene to cancer cells. That did not work.

Then, instead of going after mutated p53 genes, they went after half of cancers that used the alternative route to disable p53, blocking it by attaching it to a protein known as MDM2. When the two proteins stick together, the p53 protein no longer functions. Maybe, researchers thought, they could find a molecule to wedge itself between the two proteins and pry them apart.

The problem was that both proteins are huge and cling tightly to each other. Drug molecules are typically tiny. How could they find one that could separate these two bruisers, like a referee at a boxing match?

In 1996, researchers at Roche noticed a small pocket between the behemoths where a tiny molecule might slip in and pry them apart. It took six years, but Roche found such a molecule and named it Nutlin because the lab was in Nutley, N.J.

But Nutlins did not work as drugs because they were not absorbed into the body.

Roche, Merck and Sanofi persevered, testing thousands of molecules.

At Sanofi, the stubborn scientist leading the way, Dr. Debussche, maintained an obsession with p53 for two decades. Finally, in 2009, his team, together with Shaomeng Wang at the University of Michigan and a biotech company, Ascenta Therapeutics, found a promising compound.

The company tested the drug by pumping it each day into the stomachs of mice with sarcoma.

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Association board can't use email instead of meetings

Question: I recently was elected to the board of directors of my homeowners association. I was surprised to learn that rather than conducting board meetings with an agenda and homeowner attendance and calling executive sessions, the board regularly makes decisions via email — not an Internet conference, but simply emails. The manager initiates emails to all board directors with an issue or question and requests a majority decision. As soon as she obtains one, she acts on it. It's unclear whether all directors even read all the emails.

These are not emergency issues requiring immediate decisions, they are regular discussions that should take place in front of the owners at an open meeting. The excuse is that directors have busy schedules and it's not practicable to meet physically for every decision. This has been the standard operating procedure for a very long time.

Doesn't this violate some kind of law?

Answer: Your owners need to band together and take a firm stand that actions such as these will not be tolerated.

Nothing in the Davis-Stirling Act or the Corporations Code allows boards to meet and reach decisions via email. The board's actions violate the Common Interest Development Open Meeting Act, Civil Code Section 1363.05.

Challenging this board's conduct should begin by requesting the minutes of all the meetings for at least the last year, and all the other documents required to be produced by the association pursuant to Civil Code Section 1365.2(a). If the board cannot produce association minutes because it doesn't keep them, it may mean that all those decisions are without authority and invalid. Also, request copies of all the emails.

As for the excuse about the impracticality of physically meeting, board directors who don't have time to meet also don't have time to serve on the board and should be removed by the homeowners.

Association management is vested in the board of directors, not a manager. The general rules regarding meetings of the board of directors of a common-interest development are contained in Civil Code Section 1363.05. California's Corporations Code requires that notice be given for each meeting of the board of directors at least four days in advance. Conducting meetings by email violates both codes, leaving the association open to potential liability.

This is not the way any association should be operating. Steps can and should be taken to remove this board, whether by titleholder vote or lawsuit. Allowing this to continue only opens the door to trouble for everyone who owns property there.

The late Stephen Glassman, an attorney specializing in corporate and business law, co-wrote this column. Vanitzian is an arbitrator and mediator. Send questions to P.O. Box 10490, Marina del Rey, CA 90295 or noexit@mindspring.com.

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