Economy & Budget

Apple appears to be a company in crisis as the stock closed at $392.05 Thursday, down a whopping 44% from its lofty heights in late September 2012. The only people happy about this move are the short sellers who are having a field day. Many have forgotten how fickle consumers can be about technology and brand loyalty is incredibly difficult to sustain. Michael Dell can attest to that.

There have been ominous signs of trouble for some time now though. Leap Wireless and their Cricket brand made a huge gamble with their purchasing commitment for $900 million of iPhones but consumer demand has been soft for the iPhone 5 and the company is likely to lose millions. Consumers have simply decided that the differences between their iPhone 4S and a newer model are rather insignificant or that better deals are to be had with the popular Samsung Galaxy line, which reached a milestone of 100 million units sold by the end of last year.

So where did it all go wrong for a cash-rich company with so many Apple converts worldwide? A recent apology by Apple CEO, Tim Cook, to China, was indicative of Apple’s recent frustration with slowing sales and perhaps missed opportunities in the most rapidly expanding nation. Business penetration has been extremely lacking, which is quite surprising given the superiority of their server technologies. Moreover, in terms of security, the iPhone is arguable superior to just about any Android smartphone and the latest encryption technologies found on Macs can stand up to just about any computer.

When the financial crisis hit, politicians from high-tax nations didn’t let the crisis go to waste. Acting through the G-20, they launched an attack on so-called tax havens, asserting that “hot money” from the offshore world somehow had caused the banking system to become unstable.
 
This campaign against low-tax jurisdictions made no sense. Nobody in the Cayman Islands or Monaco was responsible for the Federal Reserve’s easy money. Nobody in Panama or Singapore had anything to do with the corrupt system of Fannie Mae/Freddie Mac subsidies.

What does Loophole Expansion have to do with Tax Reform?

Many companies are seeking to lower the federal tax rate that publicly-traded and other “C” corporations pay on taxable income. This is in line with a broad consensus that U.S. corporate (and perhaps individual) tax rates should be lowered, with the revenue lost from this effort made up for by limiting or eliminating certain exemptions and deductions, which is often referred to as broadening the base.



Some of this effort has been characterized as loophole closing. While not a popular view among the U.S. corporate tax community, some have argued that loophole closing should also be used to raise additional revenue to pay-down deficits and stimulate job creation in the U.S. 



As a member of the House Budget Committee, I support our responsible plan to balance the budget in 10 years without raising taxes. Restoring fiscal responsibility in Washington is the right thing to do for hardworking families, and Hoosiers understand that a budget that balances means more jobs.
 
When grocery shopping on the weekends, I hear from concerned mothers and fathers who are frustrated with the rising cost of staple items like milk, bread, and eggs. Anxieties stem from higher prices at the pump, rising college tuitions, and increased health insurance premiums — facing the additional burden of more federal taxes. Instead of making it harder to make ends meet, Hoosiers expect Washington to work toward real solutions to eliminate uncertainty and keep more money in their pockets.

Remember last year, when Congress passed a law that the Pentagon must cut ties with Rososboronexport, the Russian state-owned arms exporter at the heart of Bashar al Assad’s atrocities in Syria?  The Department of Defense was supposed to spend the last twelve months identifying alternatives to its contract with Rosoboronexport, so that the United States wouldn’t be dependent on an enabler of mass atrocities. Well, apparently the Pentagon forgot too, because so far they haven’t done anything to prepare the United States to cut off its ties.
 
As a refresher, Congress passed a provision, authored by Senator John Cornyn (R-Texas), in  the FY2013 National Defense Authorization Act (NDAA) that prohibited the use of DOD funds for any contract, memorandum of understanding, cooperative agreement, grant, loan or loan guarantee to Rosoboronexport.

For many years, a persistent theme in House and Senate Agricultural Committee debates over farm policy has been “Give the farm lobbies the subsidy programs they want and the heck with the consequences for U.S. trade relations.”  Nothing reflects that attitude better than the recent history of the cotton subsidy program. Like other developed countries, the United States agreed to end explicit export subsidies for all agricultural commodities by the early 2000’s under the terms of the 1994 Marrakesh Treaty that established the World Trade Organization (WTO).

This month’s leak of data on the use of offshore tax havens and anonymous shell companies from the International Consortium of Investigative Journalists emphasizes how massive and truly global the tax haven menace really is.
 
The files released by the ICIJ, analyzed in collaboration with nearly forty news outlets around the globe, implicate the families of foreign dictators in Nigeria and the Philippines, embroil international arms dealers, entangle conduits of the Iranian nuclear program, incriminate close associates of the current French President, and expose scores of other tax evaders and swindlers in the U.S. and around the world.

In the midst of an economic downturn, the U.S. agricultural sector has been remarkably resilient because American farmers have been willing to diversify and innovate. The expansion of renewable energy and the emerging national bioeconomy have been vital components of that diversification. U.S. agriculture supports 16 million jobs, both in rural and urban areas, including equipment manufacturing, bio-based manufacturing (using agricultural products to replace petroleum in manufactured goods), food and fiber processing, bio-energy production, and retail. More importantly, agriculture supports jobs and economic growth for the future by supporting development of innovative technologies.

The annual budget process in Washington is a critical opportunity for both parties to offer solutions to the most pressing challenges facing our nation: record poverty rates, high unemployment and a shrinking middle class. Unfortunately, the president's budget - much like the Senate’s budget - doubles down on failed policies that limit opportunities for advancement and trap millions of Americans in a life of poverty and dependency.

In addition to weak economic growth and a looming debt crisis, fiscally bankrupt and ineffective welfare programs are a fundamental threat to every American who aspires to make it to the middle class. Despite record-level spending increases over the last five to 10 years, poverty rates are the highest in a generation with one in six Americans living in poverty.

On Tuesday April 16th, the Senate Judiciary Committee Subcommittee on Antitrust, Competition Policy, and Consumer Rights will hold an oversight hearing on the state of antitrust enforcement with the heads of the Federal Trade Commission and the Department of Justice’s Antitrust Division as witnesses. The Antitrust Subcommittee has a stellar record on putting a spotlight on the country’s most important antitrust issues, and an oversight hearing is long overdue. Their hearings in the past few years have highlighted competitive problems in media, airline, communications and health care markets. The subcommittee has also played an important role in encouraging the agencies to ramp up antitrust enforcement.