Money Minute: Obama Targets Corporate Tax Dodgers
The party may soon be over for companies trying to dodge U.S. taxes through so-called "inversions."
Inversions, where a U.S. company buys a firm in a foreign country and relocates there to avoid paying U.S. corporate taxes, which are among the highest in the world, are becoming the target of the Obama administration. It's a move that has become very popular lately particularly among pharmaceutical companies. But the president wants it to stop.
Treasury Secretary Jack Lew spoke at a conference Wednesday encouraging Congress to enact laws that would ban the practice immediately and retroactive to May. That could jeopardize deals in the works for Medtronic (MDT) and Mylan (MYL).
As part of Lew's discussion on business reform he also said the tax rate for corporations could be lowered to the 20 percent range, which is a big improvement from the current top rate of 35 percent.
BMW is recalling roughly 1.6 million more of its 3-Series cars from model years 2000 to 2006. The issue has to do with air bags in the front passenger seat that when deployed could cause fragments of metal to hit passengers' faces. The air bag inflator is made by Takata, which has been responsible for millions of recalls over the past few years. This week's BMW recall is a much larger one but not the first related to the air bags. Last year it recalled 42,000 3-Series models for the same problem.
In trading Wednesday on Wall Street, the bulls beat the bears with the Dow Jones industrial average (^DJI) gaining 77 points, the Nasdaq composite (^IXIC) up 9 points and the Standard & Poor's 500 index (^GPSC) picking up 3 points.
When flying nowadays, you are constantly nickeled and dimed for things you once didn't have to pay a penny for and the airlines have come to rely on that revenue. Airlines around the world took off with $31.5 billion in fees last year. Adjusted for inflation that is more than 11 times the fee revenue just six years ago. Most of the fees -- 60 percent of them -- come from credit card companies paying airlines for frequent flyer miles it then offers to its customers. Of the money coming out of our pockets, the biggest revenue came from baggage fees followed by fees for things like drinks on board and advanced boarding. Three U.S. airlines topped the list for bringing in the most non-fare revenue: Delta (DAL), United (UAL) and American (AAL).
And finally, home-sharing website Airbnb, which has faced legal challenges in many cities around the world, including New York City and San Francisco, has just rebranded itself to give itself a new identity. While it features an entirely new looking website with video, it is its logo that is creating the most buzz among social media sites. Let's just say it's a little suggestive. The company says it is meant to look like an upside-down heart but does anyone really buy that? One thing's for sure. The campaign has worked so far. For a rebranding, it's getting lots of play.
-Produced by Karina Huber.