BUSINESS
02/22/2012 07:37 am ET | Updated Feb 22, 2012

Tax Code Cracking: Seven And A Half Things To Know

Thing One: Cracking The Tax Code: President Obama will try to swipe the political football away from his GOP rivals today by proposing a tax cut for corporations, paid for by reforms in the tax code that will close tax loopholes, the New York Times (and many others) reports. In doing so, he appears to be attempting to pull a Bill Clinton in 1996. The then-president swiped Bob Dole's main campaign theme, welfare reform, away from him by going ahead and reforming welfare himself. Why elect a Republican, he seemed to say, when you can elect a handsomer Democrat acting just like a Republican? This time around a major campaign theme of the once and maybe future GOP front-runner Mitt Romney is how mean President Obama has been to corporate chieftains, who are cowering in their golf clubhouses afraid to create jobs because of the mean, mean president. The president will undercut that argument by offering to cut corporate taxes -- though his proposal could very well raise taxes for many companies who already pay way less than the 25 percent to 28 percent rate he's proposing, thanks to the loopholes he wants to close. Anyway, it's all probably a moot point, as the massive tax reform proposed could take longer than one election cycle, the NYT suggests.

Thing Two: Round Number Watch: The Dow Jones Industrial Average hit 13,000 yesterday! It might hit it again today. It previously hit that number back in May 2008. It spent most of 2007 above that number. I guess what I'm saying is, who cares? The Dow is a bizarre turducken of a stock index, 30 stocks crammed into a price-weighted index, which necessarily keeps out vastly important companies with giant stock prices, like say Apple. Most people own the S&P 500 in their battered 401(k)s, so the Dow is meaningless to them in reality. Except! Everybody watches it, and everybody likes nice, round shiny numbers, so being able to hit and then rise past 13,000 could be a psychological lift to the economy. And President Obama's reelection chances.

Thing Three: Greece Deal Post Mortems: At least for the moment, the stock market doesn't have an imminent Greek default and euro-zone exit to worry about. That could be months and months away now. Whew! In the New York Times the tireless Peter Eavis writes not one but two stories about the implications for Greece and Europe going forward of the Greek debt deal struck over the weekend. First, investors are now keeping a wary eye on credit default swaps, he writes: Euro-zone leaders have tried desperately to avoid triggering these default-insurance policies, but investors are getting increasingly angry about the fact that this insurance has been useless to protect them against losses. Meanwhile, the Greek debt deal sets a poor precedent for how the rest of Europe's debt problems will get handled. Such doubts kept the Greek deal from sparking much in the way of a market rally yesterday. European stocks, and the euro, and U.S. stock futures, are all lower this morning.

Thing Four: Slow Recovery For Home Sales: Today kicks off the first of a handful of key housing reports due this week. At 10:00 a.m. ET, the National Association of Realtors reports pre-owned home sales in January. Economists, on average, think sales rose to an annualized rate of 4.63 million units from 4.61 million in December, according to Briefing.com. Housing is as affordable as it has ever been, supposedly, when you account for low mortgage rates (which technically should be even lower, writes Matt Phillips in The Wall Street Journal) and a years-long collapse in prices. But it's hard to muster too many buyers when credit is still generally tight and unemployment is high.

Thing Five: Overdraft Oversight: The government's new consumer protection watchdog is considering looking into how banks are charging overdraft fees on checking accounts, penalties that bring the banking inudstry a cool $30 billion per year. That'll buy a lot of bouncy checks. The Fed and the FDIC have already tried to clamp down on the practice, but the banks keep raking in overdraft cash, so maybe more needs to be done.

Thing Six: Fed Sends The GOP To Its Fainting Couch: Congressional Republicans are deeply concerned about a recent Federal Reserve white paper proposing ways to fix the housing market, concerned that the Fed has overstepped its bounds into fiscal matters, when it should stick to its monetary knitting, the Washington Post writes. Former Fed Chairman Alan Greenspan, who essentially sold Congress on the Bush tax cuts in 2001 and could not ever be enticed to shut up about fiscal policy during his interminable tenure at the Fed, could uncharacteristically not be reached for comment.

Thing Seven: Apple To Offer Bite? Could Apple be about to dole out some of its $100 billion cash stockpile? That's possible, writes Reuters, in a walk-up to Apple's shareholder meeting on Thursday. "Apple's cash balance is the largest among U.S. technology companies, and many analysts think the company should put at least some of the money to work. The company last bought back shares in 2001 and scrapped its dividend in the mid 1990s."

Thing Seven And One Half: David Foster Wallace would have been 50 today. In his honor, here's a link to his classic article for Harper's, "Shipping Out," also known as "A Supposedly Fun Thing I'll Never Do Again." Hopefully it will make you swear off cruises forever, if the Costa Concordia disaster or norovirus outbreaks have not already done that for you.

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