Tuesday AM April 15th, 2008
by: Ed Mayberry, April 15, 2008 12:04:00 pm
The deadline to file your 2007 income tax has arrived. The U.S. Postal Service is staying open late to help filers beat the midnight deadline. The main post office downtown and the Foxbrook branch in Humble are open until midnight, and other stations around town are open thirty minutes later or more this evening. Seven curbside collection sites are operating from 4 p.m. until midnight around the downtown post office on Franklin.
The IRS says that more than $2.5 trillion was collected in income taxes in fiscal 2006—nearly 50 percent from individual income taxes. About 80 million returns were filed electronically last year—more than half of the tax returns. The average tax refund in 2007 was $2,255. About ten percent of Americans wait until the last day of tax season to file or request an extension.
A National Taxpayers Union report based on IRS figures says the average person is spending more than a day and more than $200 calculating and compiling numbers for his or her returns. IRS figures show that all taxpayers, from those using the simplest form to those using longer forms, spent 26.5 hours in record keeping, studying the law, and preparing and sending their forms for the 2006 tax year. That's up from 25.4 hours three years earlier. The average out-of-pocket cost, including for those taxpayers doing their own taxes, was $207. The self-employed taxpayer paid an average $444. The report estimates that, using an hourly compensation rate of $26, the value of time lost compiling tax returns was $92.6 billion.
A new report says the number of large companies being audited by the IRS has fallen in the past 20 years, while more small and mid-sized businesses are coming under scrutiny. The Transactional Records Clearinghouse says there's been a "historic collapse'' in audits for corporations holding at least $250 million in assets. The IRS isn't disputing the data, but says it disagrees with suggestions that it's easing oversight of the biggest corporations. The agency says it's focusing resources on areas of noncompliance, inspecting tax shelters, "extraordinarily complicated'' partnerships, and those corporations where shareholders, and not the company, have to report income or losses. But the director of a firm that provides tax services to medium-sized companies fears the small and medium-sized ones will be "taking it on the chin'' as the IRS seeks to boost its audit numbers to impress Congress.
Businesses saw inventories rise by a hefty amount for a second straight month, likely reflecting an unwanted buildup in stockpiles that will act as a drag on economic growth in coming months. The Commerce Department reported Monday that inventories held by businesses on shelves and backlots increased by 0.6 percent in February after an even bigger 0.9 percent gain in January. The increase in inventories, while boosting overall economic output in the first quarter, will likely act as a drag in coming months as businesses cut back on production to reduce stockpiles to more comfortable levels. The inventory increase in February came at all stages of production. Manufacturing inventories rose by 0.5 percent, wholesale inventories were up 1.1 percent and retailers saw their stockpiles increase by 0.2 percent. The rise in inventories was accompanied by a drop in sales for the month.
Consumers are still being bothered by a severe credit crunch, rising energy and food costs and a prolonged housing slump. They stayed away from the malls again in March, with retail sales rebounding only slightly after a big drop in February. The Commerce Department reports that retail sales edged up two-tenths of a percentage point in March after a four-tenths of a point decline in February. The March gain primarily reflected higher costs for gasoline, which climbed to record highs. Excluding a big 1.1 percent rise at gasoline service stations, retail sales would have been flat last month. The new report did nothing to dispel worries that consumers will cut back so sharply on spending that the country will tumble into a recession. Consumer spending accounts for two-thirds of total economic activity.
A vivid new sketch of how the housing crisis is weighing on the minds of many Americans. An Associated Press-AOL Money and Finance Survey finds one in seven mortgage holders are worried that they won't be able to make their monthly payments on time over the next six months. More than a quarter are concerned that their home will lose value over the next two years. Sixty percent of the people surveyed say they definitely won't buy a home in the next two years. That's up from 53 percent in a poll in 2006. Just 11 percent are certain or very likely to buy soon, down from 15 percent two years ago. The growing reluctance to dip into the housing market seems to stem partly from worry that housing prices will continue falling. That's good if you're buying a house but bad if you're trying to sell one.
The Houston city controller's office is announcing the refinancing of $653 million of utility system debt. City Controller Annise Parker says that will lower interest payments and save millions in taxpayer dollars. Parker says before refinancing, interest rates were as high as 6.7 percent. Now the interest rate averages 1.6 percent—a weekly savings of about $640,000.
Delta and Northwest could announce a combination this week that would create the world's biggest airline. But according to three people familiar with the talks, pilot contract issues still loom and there is no guarantee the deal will move ahead. The sources say officials are mobilizing for an announcement provided the boards of the two companies give final approval to a deal. They've been having ongoing merger-related conversations. The deal, if announced, could see strong opposition from Northwest pilots. One person says it's increasingly likely the two airlines will proceed without a pre-arranged seniority integration agreement between their pilots unions. So the main issue that remains is whether Delta pilots are willing to make changes to their contract to give delta more flexibility after a combination.
Blockbuster says it's going directly to shareholders with its takeover bid for Circuit City. Dallas-based Blockbuster says the consumer electronics chain has not responded to repeated but unsolicited offers. The latest is worth more than a billion dollars. Blockbuster has had troubles of its own competing with online movie rental companies like Netflix. That's led Richmond, Virginia-based Circuit City to question how the movie rental chain would finance its offer. Circuit City is advising its shareholders to take no action until the company's board reviews the bid. Blockbuster's chief executive says the deal is backed by board member Carl Icahn, who could be a source of financing for the deal. James Keyes says the deal would create a chain similar to Apple's stores that could both sell portable devices and the entertainment to play on them.
The founders of the Wild Oats Organic Grocery chain are returning to the Boulder, Colorado, retail market this week when they open a Sunflower Farmers Market store. Mike Gilliland and Elizabeth Cook founded Wild Oats Markets in Boulder in 1987. They launched the Sunflower chain after stepping down from the Wild Oats board in 2001. Wild Oats was subsequently acquired by Austin-based rival Whole Foods Market in 2007. The Sunflower Farmers Market chain is based in Boulder and has 13 stores in Arizona, Colorado, Nevada and New Mexico, but until now it hasn't had a retail outlet in its headquarters town. The first Boulder store opens on Tuesday, with a grand opening planned Wednesday. Gilliland said Sunflower's mission is to offer natural and organic foods at low prices.
A federal appeals court in Washington says it won't reconsider a victorious ruling it handed Tivo in its patent dispute with Dish Network. The decision puts Tivo closer to receiving the $94 million an east Texas Federal Court awarded the Alviso, California-based digital video recorder maker for Dish Network's patent infringement. It also sets an important legal precedent that gives Tivo leverage as it negotiates partnerships with other satellite and cable TV providers who want to use DVR technology. Dish Network says it will file an appeal with the U.S. Supreme Court.
Officials say the impending influx of military personnel will have a profound impact on San Antonio and Fort Sam Houston, one of the army's oldest active posts. The U.S. Army Corps of Engineers is at the front edge of a $2 billion binge-building program. The plan will likely transform the military in San Antonio and neighborhoods near Fort Sam. The post will see the bulk of the Congressional construction spending. San Antonio and Fort Sam were big winners in the latest round of base realignment and closure decisions three years ago. Up to 12,400 new military and civilian workers mean an influx of at least 2,500 spouses and 2,500 school-age kids. More families are likely to generate demand for new apartments and condos, as well as grocery stores, dry cleaners and other services. In three years, the Corps of Engineers will build or renovate more than six million square feet of space. The work includes 78 major buildings and is the equivalent, in square footage, of adding about 30 Wal-Mart Supercenters to San Antonio, says Randy Holman, program manager for the Army Corps of Engineers. The overwhelming volume of construction work is sapping the city's already busy labor force. Starting in 2010, the new military and civilian workers in the 36 additional agencies could clog streets and worsen traffic near the urban post. It already has about 23,000 workers.
A new report says millions of baby boomers are about to enter a health care system for seniors that not only isn't ready for them, but may even discourage them from getting quality care. The findings of an Institute of Medicine Committee report on the health care outlook for the 78 million baby boomers about to begin turning 65 include the conclusion that Medicare fails to provide for team care that many elderly patients need. It also says that there aren't enough specialists in geriatric medicine. The study also says Medicare may even hinder seniors from getting the best care because of its low reimbursement rates. However, the American Medical Association says that seniors' access to Medicare in coming years "is threatened by looming Medicare physician payment cuts."
Liverpool Football Club manager Rafa Benitez is demanding showdown talks with the club's arguing owners over their approach to former Germany coach Juergen Klinsmann last year. Reds co-owner Tom Hicks says estranged partner George Gillett, Jr., and Chief Executive Rick Parry instigated the meeting with Klinsmann as a possible replacement for Benitez. Benitez says he's shocked to learn that Parry was at the meeting. Hicks has promised Benitez a contract extension, but Benitez wants the issue resolved before Liverpool's Champions League semifinal match against Chelsea next week. Benitez is also insisting on the feuding parties getting together to tell him the truth to his face. Hicks has mostly been blamed by Liverpool fans' anger over the approach. The Dallas businessman also owns baseball's Texas Rangers and the Dallas Stars of the NHL. Gillett also owns the NHL's Montreal Canadiens.