Gold inches down, US data calms economic concerns

Gold edged down in thin trade on Thursday after encouraging U.S. jobless claims data calmed some worries about economic growth, but concerns over tensions on the Korean peninsula could present some support.

Bullion barely reacted to news that Vietnam's central bank has granted additional quotas for domestic companies to import gold between now and the year end, but dealers noted buying on plunges from consumers in Asia.

Spot gold eased $4.42 to $1,369.29 an ounce by 0240 GMT - well below a lifetime high around $1,424 struck in early November. It had hit an intraday low around $1,367 an ounce. U.S. gold futures fell $4.5 to $1,368.5 an ounce. U.S. markets are shut on Thursday for the Thanksgiving holiday.

"I would say emotions are still bullish. The conflict between North and South Korea is not going be solved within a short period of time," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

"It will take a bit of time. There may be more buying at below $1,370." North Korea warned of additional military attacks if South Korea makes "reckless military provocations again," its official media said on Thursday.

The United States says it considers North Korea's actions were an isolated act tied to leadership changes in Pyongyang, and many experts say the North carried out the shelling to burnish the image of the inexperienced and little-known younger Kim.

U.S. crude futures firmed on Thursday, extending a rally from the day before on optimism about the U.S. economic recovery, but the Thanksgiving holiday in the United States and concerns over tensions on the Korean peninsula may limit further gains.

BC government call off 15 per cent income tax reduction

The proverbial carrot that Premier Gordon Campbell hangs in front of millions of British Columbians has been suddenly yanked away.
Two weeks after Gordon Campbell announced he was stepping down as Premier, the provincial government has decided to hang the 15 per cent reduction in personal income tax rates for the first $72,000 of personal income that was promised in Campbell's televised address last month.

Campbell says this is not the time when he or cabinet should be tying the hands of the future leader. "They will still have the chance where they can bring in the tax cut retroactively January 1, if they decide to do that."

But Finance Minister Colin Hansen says they can't say when or if the tax cut would be re-instated. "The choice as to whether or not to proceed with that should be made by the new premier in conjunction with the cabinet at that time."

NDP Leader Carole James says she was against the tax reduction to start with, but this is a whole new Pandora's Box, "To pull back on that tax cut now, it shows that the government is completely focused on damage control, on their own problems, and sadly it's British Columbians who are hurting because of that."

Brian Bonney with the Canadian Federation for Independent Business says taking away this tax benefit is a big fault. "You give people hope correct before Christmas that they're going to have some extra money to pay off a few bills in the new year, and in one foul pounce that seems to be taken away from us."

He says this is yet another box when politics has trumped good public policy and created unnecessary uncertainty for businesses.

The tax reduction would have taken effect January 1 of next year, provided it received legislative endorsement. It would have become the second largest personal income tax relief gauge in BC's history.

The government will still roll out a throne speech and budget in early February, but won't proclaim any programs until a new party leader is chosen later that month. There will also be what the Executive Council calls a "status quo" budget, with no new proposals beyond what is statutorily required.

Kan. gov.-elect against revoking sales tax hike

Gov.-elect Sam Brownback said Thursday that he opposes a quick revoke of this year's Kansas sales tax increase, an idea circulating among Republican legislators. The incoming GOP governor did leave room for him to back the idea in upcoming years. Brownback already has said he wants to amend the state's tax system to promote economic growth. But Brownback said the Legislature shouldn't revoke the sales tax increase next year because of the budget problems. He takes office and the Legislature assembles its annual session Jan. 10.

"We're short of capital for the state, and I don't think it's something that we should be doing at this time," Brownback told reporters after a Veterans Day ceremony in Topeka. "Our economic situation is not even." Rep. Owen Donohoe, a Republican from the Kansas City-area suburb of Shawnee, suggested in a recent letter to colleagues that GOP House members make the revoke a top priority. He acknowledged in an interview that he hadn't spoken with Brownback about it.

In his letter, Donohoe called on colleagues to commit to a conventional agenda, noting Republicans' big election gains. The GOP picked up 16 House seats, giving those 92 to Democrats' 33. "With the sweeping consent of the Kansas voters, we have a rare opportunity to effect substantial legislation that reflects fiscal and family values in the next session," he wrote.

House Speaker Mike O'Neal, a Hutchinson Republican who, like Donohoe, opposed the tax increase, said it's fair to debate revoking it. However, he also said legislators may want take a longer-term look at tax policy and consider plummeting individual and corporate income taxes to spur growth. Brownback said last week that he'd liked to cut individual income taxes.

"I think that all comes into the discuss that we certainly will have," O'Neal said. The sales tax rose from 5.3 percent to 6.3 percent in July. Outgoing Gov. Mark Parkinson, a Democrat, had pushed for the increase, saying it was necessary to keep away from crippling cuts in education funding and social services. The tax increase is expected to provide $314 million for state programs during the current fiscal year and more than $370 million during the fiscal year that begins in July 2011.
For the first three years, a small portion of the revenues will help support a 10-year, $8.2 billion transportation program that legislators approved this year, also at Parkinson's urging. The sales tax is due to drop to 5.7 percent in July 2013, with all funds raised by the last 0.4 percent going to transportation. O'Neal acknowledged that revoking the increase next year could "hamstring" the program.

"There's a lot of moving parts here," he said. Parkinson and other supporters of the sales tax increase dispute that it stabilized the state's finances. But the state also used federal stimulus funds to bolster aid to public schools and spending on social programs.

Kansas officials expect no additional incentive funds, leaving a $492 million gap in the next fiscal year's budget. "We've got to balance our budget," Brownback said, adding that his goal is to chapter out accounting moves the state has used in previous years to help paper over some problems.

But the governor-elect also refused to portray the sales tax increase as good. "When you raise taxes, you send a signal to the rest of the country (that) you're a high tax state," he said. "We've been a high tax state in this district, so the way to grow is not that way."

To Tax More Rich ‎

Washington State, where politics is as liberal as it gets, has an initiative on its Nov. 2 election ballot to charge a personal income tax on the “rich,” according to an Oct 26 special report by the Tax Foundation. Presently it’s one of seven states with no individual income tax. Washington State voters, along with other Americans will be worriedly awaiting Congress’s decision in the lame duck session next month whether to let the Bush tax cuts expire on Dec. 31. President Obama and his fellow lefties in Congress have bellowed endlessly that the Bush tax drops favor the “rich.”

Washington State’s Initiative 1098 would initiate an income tax on high earners at a rate of 5 percent on income over $200,000 ($400,000 for couples) and 9 percent on income over $500,000 ($1 million for couples). “Officials guess that the new tax would raise approximately $2.2 billion per year. Of that amount $600 million would be used to decrease property taxes by about 4 percent and provide additional credits against the state gross receipts tax.” New spending on health care and education would assert the left over $1.6 billion.

If proposition 1098 passes, “a constitutional challenge is likely,” writes Joseph Henchman. Director of state projects for the Tax Foundation. Since the income tax was ruled unconstitutional in the state, voters there have discarded previous attempts to accept an income tax. “Washington’s planned new income tax “would be out of the norm in two respects, said Henchman. “It will relate to all adjusted gross income with no exemptions or deductions, and it will apply only to high-income earners.” Further, “just as numerous other states are overturning so-called millionaires’ taxes or allowing them to expire, Washington would be accepting one.”

Washington’s constitution has a uniformity section. Its purpose has been described as “strict constitutional supplies requiring equal and uniform taxation.” The initiative’s extremely slim base (exempting over 98 percent of taxpayers) would probably violate that provision,” Henchman wrote. In essence, a mass of voters would decide whether to impose a tax on 1.2 percent of the population.

Sales tax receipts up for most in county

Most all of the entities that collect a local sales tax in the county saw tax receipts up over year-ago statistics, according to the latest information from State Comptroller Susan Combs. The City of Corsicana saw sales tax receipts increase 3.98 percent from year ago statistics. The city’s split of sales taxes for the month was $416,471.65, up from $400,512.00 from one year ago. For the year-to-date, sales tax receipts are down 1.01 percent, with receipts totaling $4,122,672.68 for 2010, compared to a year-to-date total of $4,165,154.97 for 2009.

Statewide, sales tax receipts were up 6.8 percent from year ago figures. Gains in almost all sectors, including oil and gas, construction, manufacturing, wholesale trade, retail trade and restaurants were noted, Combs said in a release announcing the latest statistics. The collections actually symbolize sales taxes collected in September from sales made in August 2010.

Even with the 1.01 percent arrears from year ago statistics, city leaders are happy with that figure — they had budgeted a loss of 1.58 percent for the year. Should next month’s figures come in at or near 2009 levels, the city will end the economic year very close to what it had projected, around $4.9 million.
Going forward in the budget just adopted, city leaders have estimated a drop of about $100,000 from this year’s projection, although it could be spring before a correct projection on receipts could be made.

It’s very important that we end the year where we thought we were going to. It is a good sign. It is really very satisfied to see (August) not in a ‘negative’ category. That has not been the trend this year.

Only four tax entities in Navarro County Mildred, Navarro, Oak Valley and Richland saw decreases for the month from year ago figures. Combining all taxing entities in the county, receipts were up 4.58 percent from the same month a year ago, and down 1.05 percent for the year, with $442,578 collected for the month, and $4,386,088.71 year-to-date.

Fight over Bush-era tax slash moves to campaign trail

Congress prepared to leave town without voting to expand the Bush-era tax cuts Wednesday, choosing to shift the fight over one of the year's biggest partisan battles from the halls of Congress to the political campaign trail.Both Democrats and Republicans see latent political gains in carrying the tax fight to their home states, banking on their ability to induce voters that the other side is to blame for the impasse. Congress is expected to put the issue to a vote in the post-election lame-duck session.

The decision introduces a fiery matter into an election in which control of the House, and possibly the Senate are in the balance. What happens to the $3.7 trillion tax package will feel the pocketbook of almost every voter. It also has major implications for the federal budget and U.S. economy in the residue of President Barack Obama's first term. Most Democrats support extending the tax cuts to all but top earners -- individuals making $200,000 or more and families earning $250,000, for whom they favor letting the Bush cuts lapse. Unless Congress acts, all the tax cuts will slip at year's end. Republicans and some conservative Democrats favor extending the cuts for all, arguing that tax cuts for wealthier Americans would help businesses expand and create jobs.

Voters who are focused on pocketbook issues this campaign season will be offered two distinct views on the tax cut debate. As the tax cuts loomed large over the final days of congressional debate, both the House and Senate conducted a flurry of votes, even though both Democrats and Republicans were anxious to leave Washington for the campaign season. Congress was on track to reach an agreement to keep the government running by approving a stop-gap spending bill called a continuing resolution that would hew to 2010 spending levels. The resolution was needed because Congress had failed to pass any of its annual appropriations bills.

Both the House and Senate also conducted a series of votes this week on core issues designed to underscore Democratic priorities, even though the bills had little chance at final passage before the midterm elections. The House on Wednesday passed legislation to fund a new health program for responders and community members injured in the Sept. 11, 2001, terrorist attacks in New York, and re-open the federal victims' compensation fund. The bill has not passed the Senate.

As a last effort to address the nation's stubborn unemployment rate and promote jobs, the Senate voted also on an outsourcing bill that offered a payroll tax holiday to firms bringing overseas jobs back to the United States and imposed tax penalties on those that ship jobs overseas.The outsourcing bill failed largely along party lines, with some Democratic dissent, in what Sen. Mitch McConnell of Kentucky, the Republican leader, called "about as pure a political exercise as you can get."As the tax cut debate hangs over the political season, both sides offered a glimpse of the arguments as they prepared to make the case to voters.

"It's irresponsible for them to leave town," said Rep. John Boehner of Ohio, the Republican leader, as Democrats made it clear they would not be bringing the issue to the floor. "This is no way to run the people's House."Many economists say that as the economy continues to struggle it would be unwise to raise taxes on the middle class. They give credence to the proposal from Obama and Democrats to extend tax cuts for those making less than $200,000 and families making less than $250,000, despite the $3 trillion cost.But economists are split over extending $700 billion in tax breaks for the wealthy, as the GOP want to do.

Mark Zandi, chief economist at Moody's Analytics, has argued for phasing out the tax break for the wealthy but not until after 2011.Studies from the Tax Policy Center show just 1.7 percent of all American taxpayers earn more than the $200,000 cut off.

Tax credits hype as key to homelessness

Tax cuts -- and not more funding for government-led programs -- could be the key to helping end homelessness in Canada if Ottawa offers tax credits to entice private enterprise into building more low-income housing, according to a policy paper released by the University of Calgary.

The report, issued by the university's School of Public Policy on Tuesday, says U.S.-style tax credits could help stem the tide of condo conversions and make it more financially feasible for developers to construct new multi-family rental units.
Affordable housing has become particularly critical in cities like Calgary, where roughly a third of all multi-family rental housing units in this city have vanished since 1992, and resident research associate for the University of Toronto's Cities Centre, who also co-authored the report.

"Homelessness is a problem that will be solved only with the connection of the private sector. We deem we must pay attention to tax incentives and regulatory measures to harness the energy and efficiency of the private sector.
The tax incentives being planned are based on the U.S. low income housing tax credit, which has been operating since 1986.

It would modify existing Canadian tax laws to offer breaks to developers who include affordable housing units in new construction. Building owners making major repairs on apartments with an eye to converting them into condominiums could also be eligible for the tax credits, if they make a long-term pledge to maintain the units as rentals.

While the tax credits would divert $50 million in tax revenues from federal coffers in its first year, $100 million in the second year and $150 million in its third year, it would fund between 3,500 and 5,000 rental units nationwide.
Alberta's share of this boost to rental spaces would be between 300 and 500 units.
The tax cuts are a small government investment that could yield dramatic results because they offer a financial incentive for private business to get involved in helping address a social concern, said Ron Kneebone, director of economic and social policy research for U of C's school of public policy.

And ultimately it will be the taxpayer who is going to win the race.