Blueprint for Tax Change
The president's tax reform panel recommended sweeping simplification of the tax code. The plans would repeal the alternative minimum tax, end the deduction for state and local taxes and limit tax-free health insurance and home-mortgage deductions. Lower taxes on dividends and capital gains would largely eliminate double taxation of business profits, prompting complaints from liberal Democrats about favoring the rich. Conservative Republicans were also unhappy; they've been pushing a national sales tax plan.
A Mess for Merkel
Germany's grand coalition began to fall apart even before taking office. Franz Munterfering, chairman of the Social Democrats who was slated to be deputy chancellor and labor minister, announced he would step down after losing an internal battle with party leftists. The next day, Edmund Stoiber said he would remain as Bavaria's premier rather than join the government of fellow conservative Angela Merkel as economic minister. Merkel continued to try to hammer out agreements on cuts in spending and corporate taxes.
Business Welcomes Alito
Business interests warmed to President Bush's latest Supreme Court nominee. As an appeals court judge in Philadelphia, Samuel Alito Jr. backed strict enforcement of contracts; limited corporate liability in damage cases; and set high hurdles for lawsuits by consumers, shareholders and workers. His rulings have overturned environmental enforcement actions and limited federal authority to regulate business speech and activity. His knowledge of business law may make it more likely the top court will take up appeals in that area.
Big Week, No Pop
Steve Case, the architect of the much-maligned Time Warner-AOL merger, resigned from the board of the combined company as it considers selling off part of the struggling Internet service provider. And in response to demands by rebellious shareholder Carl C. Icahn, the media giant announced it would more than double a stock buyback program, to $12.5 billion. But all that, along with an 80 percent jump in third-quarter earnings, wasn't enough to lift Time Warner shares. They closed down slightly for the week at $17.61.
Spending on Fight Card
A budget showdown was brewing in the House as moderate Republicans balked at plans to increase co-payments for Medicaid recipients, cut spending for foster care and open coastal areas to oil drilling. A Senate-passed budget plan would achieve similar deficit reduction by cuts in spending for cotton subsidies, student loans and guarantees for health insurers under the new Medicare drug program. The Senate budget also would increase corporate premiums for federal pension insurance and open the Alaskan wilderness to drilling.