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Monday, April 29, 2013

Wolff: Kochs eye old media to create new voice

Story originally appeared on USA Today.

The ultrarich and ultraconservative Koch brothers might like to build a conservative media empire from the old Tribune Co. But is that what the audience wants?

The Koch brothers, the unimaginably rich and combatively conservative oil heirs, are telling people that they might like to buy the newspapers owned by the recently bankrupt Tribune Co. — Chicago Tribune, Los Angeles Times, Hartford Courant and The Baltimore Sun, among them.

Their idea, to the consternation of many liberals, is to turn these papers into a national network of conservative voices, or what The New York Times calls "a broader platform for the Kochs' laissez-faire ideas."

Of course, this does not mean that they will buy the papers. In fact, the thing that many super-rich men like even more than the idea of owning newspapers is having people thinking they could own them if they wanted to.

COLUMN: Hey, 'New York Post' editor, what were you thinking?

Still, they might. The Kochs are rich enough to buy what most other sane men would not.

Of course, there are many simpler and cheaper ways to get attention for your view than buying troubled newspapers. You can fund think tanks and foundations. You can start lobbying groups. You can contribute virtually unlimited amounts of money to the candidate of your choice. You can finance advertising campaigns. All of which the determined Koch brothers have done.

But that has not, apparently, been enough.

Because, in a sense, politics is one thing and media is another.

As much as wanting lower taxes and less government interference, the Koch brothers want less liberal media — or more conservative media.

They may believe, with some justification, that media, and by that they mean mostly liberal media, is the real government — the cultural advance guard that is changing this country. As powerful as the Koch brothers are, they likely feel they are not as powerful as, say, The New York Times, or George Clooney, or Jon Stewart.

It might seem when you are rich enough to buy anything you want that one thing still out of reach is media — or at least good media. In fact, the more money you have, the worse, it might seem, you're treated by the media. There are people who have gotten worse press than the Koch brothers, but not too many. Perhaps Michael Bloomberg is an example to them — a rich man whose favorable press comes at least in part because he can give journalists jobs.

Still, it seems also clear that the Kochs' passions are as important as their egos. They not only believe in the usual conservative verities, but they appear to be in something of a personal war with President Obama.

The Tribune newspapers might seem like a formidable weapon for them. Curiously, most of the papers they are proposing to buy are in cities that voted overwhelmingly for the president — cities that have not had a reliably conservative base in a generation or two. (The Tribune Co. also owns Hoy, the second-largest Spanish-language paper in the U.S.)

Why you would go into a business trying to sell things that your customers don't seem to want is hard to understand.

What's more, they would be buying enterprises staffed by several thousand unionized people who don't share their views. True, most of these people are not in the views business and are primarily concerned with reporting local news. (Actually, many are concerned with selling advertising and trucking copies across town.) Perhaps the Kochs believe that they would create something like The Wall Street Journal, where the reporters do their straightforward jobs while the opinion pages bubble with rancor and joie de guerre. Except the Koch brothers wouldn't be buying The Wall Street Journal. They would be buying a bunch of local papers.

Other than a few editorials tilting to their views, it is hard to imagine how they get a new conservative national voice to rise from Los Angeles, Chicago, Hartford and Baltimore — or in Spanish.

Have I mentioned that the news business is not very good? While the Kochs are rich enough not to have to worry about this, money is exactly the thing the rich worry about. So they will likely soon find themselves more concerned about paper costs than tax rates. And social-media traffic. The Koch brothers, like many rich men in their 70s, still read newspapers. But every day, there are fewer newspaper readers. So the brothers would find themselves not just worried about how to communicate their conservative views, but how to do it in a way that generates likes and shares and page views.

It is just a bit astonishing for people in the newspaper business to think about what owning a newspaper, no less a chain of newspapers, would mean for people who have never owned one, or worked for one.

The Koch brothers, though, probably believe that their success as businessmen means they have as good or better a chance to sort out the newspaper business as the professionals who have so far failed in this regard.

If they can, more power to them.

A bit more likely, they would become, not just to the liberal establishment but to their friends and fellow billionaires as well, figures of head-smacking pity and amusement.

Bell: How many NFL draftees will end up broke?

Story originally appeared on USA Today.

Thursday was graduation day in the football business, time for the best and the brightest from the college crop to start making a living.

But in the back of my mind, as I watched one first-round pick after another bear-hug Commissioner Roger Goodell on the stage at Radio City Music Hall during the NFL draft, I wondered: How many of these guys will wind up broke?

We've heard too many cases of instant football millionaires who wind up bankrupt for assorted reasons: Squandering cash on an extravagant lifestyle. Bad investments. Child-support issues. Extended obligations for family. A career-ending injury.

"Throughout the league, if you knew the number of guys in financial trouble, it would blow your mind," former Washington Redskins coach Joe Gibbs told USA TODAY Sports.

Although the NFL and players union don't have concrete numbers, in 2009, Sports Illustrated contended that 80% of former players face financial difficulties within two years after retirement. With the average NFL career spanning roughly three years and the inherent risk that the next play could be the last, sound financial strategy is as important as the new playbook.

Two years ago, Gibbs partnered with Strayer University and conducted a financial seminar for 115 rookies in Orlando. In December, they held a seminar at Redskins headquarters, drawing about a dozen players. He has talked with players union chief DeMaurice Smith about developing a broad educational program.

In lieu of that, I've formed a panel. Some of their straight-talk advice for rookies:

Plan for your post-football careers now

"In your 20s, you think it's going to last forever," Hall of Fame quarterback Fran Tarkenton said. "I don't care how much you make. If you retire from football in your 30s, you'll still have to live for another 40 to 50 years."

Tarkenton, 73, is a product of a different era — he got a $3,500 bonus and $12,500 salary as a first-round pick in 1961. But he also developed an entrepreneurial spirit and has started more than two dozen businesses — and has launched a self-help website with Office Depot geared to small business owners.

He says time management is key for players.

"They've got to work out, but they've got to get their minds going, too," he said. "So, they've got to read the right things. None of us are too busy."

Write your own checks

"The best thing I did was managing my own finances," said Keyshawn Johnson, drafted No. 1 overall in 1996. In NFL retirement, he formed a group, which includes approximately 10 active and former players, that has invested in Panera Bread franchises.

Some hard-luck stories include players who granted advisors power-of-attorney or other means to act on their behalf when dealing with their money — leaving them vulnerable to being ripped off.

"It's always going to be a difficult transition, when you go from making nothing to something in an instant," Johnson said. "And when that happens, you take on a lot."

Johnson also preaches the need to understand tax implications, seeking mentors from the business world, appreciating modest growth.

"They also need to know that sexy investments aren't the right investment," he said. "Sometimes, guys are like, 'I'm going to support my homey (in a music project), who I've known since he was doing tracks in his garage.'"

Cap your investment.

"If you invest $10,000, okay," Gibbs said. "Understand that you could lose it, although you'd like it to grow. Just don't sign on for something that's open-ended."

Gibbs learned this the hard way. During the early- to mid-1980s, he lost a bundle in a simple partnership. It took more than four years to financially recover.

"Eventually, everyone was gone and I was the only partner left," Gibbs said.

Be wary

The $40 million lost by financial adviser Jeff Rubin — money invested by 31 former and current NFL players in an illegal Alabama casino project — is a classic example. At least 18 of the players who lost money were at one time clients of prominent agent Drew Rosenhaus, whose role could prompt discipline from the NFL Players Association.

"Those deals out there, it seems natural," Gibbs said. "You have the money, and you trust somebody."

Last week, Yahoo Sports revealed that Miami Dolphins defensive end Jared Oldrick has filed lawsuit against a financial firm, Success Trade, and an adviser with Jade Management for their role in an alleged Ponzi scheme.

Odrick is said to be among 30 athletes who invested.

Said Tarkenton, "There are no silver bullets."

Since taking over the players union leadership, Smith has emphasized personal finance. It's an ongoing challenge.

"I guarantee you every head coach in the NFL is sensing it," Gibbs said. "You see a guy in your office who's unhappy, and as you get to talking to him, it comes out. Financial stress is not conducive to playing your best ... and it hurts everything around you."

Thursday, April 25, 2013

Pew: 93% of households lost net worth 2009-11

Story originally appeared on USA Today.

WASHINGTON (AP) — The richest Americans got richer during the first two years of the economic recovery while average net worth declined for 93% of the nation's households, the Pew Research Center said Tuesday.

The Pew report says wealth held by the richest 7% of households rose 28% 2009 through 2011, while the net worth of the other 93% of households dropped 4%.

Pew says the main reason for the widening gap is that affluent households have stocks and other financial holdings that increased in value, while the less wealthy have more of their assets in their homes, which haven't fully regained their value since the housing downturn.

The upper 7% of households owned 63% of the nation's household wealth in 2011, up from 56% in 2009, said the report, which analyzed Census Bureau data released last month.

Tuesday's report is the latest to point up financial inequality that has been growing among Americans for decades, a development that helped fuel the Occupy Wall Street protests.

A September Census Bureau report on income found that the highest-earning 20% of households earned more than half of all income the previous year, biggest share in records kept since 1967. A 2011 Congressional Budget Office report said incomes for the richest 1% soared 275% between 1979 and 2007 while increasing just under 40% for the middle 60% of Americans.

Other details of Tuesday's report:

—Overall, the wealth of American households rose by $5 trillion, or 14%, during the period to $40.2 trillion in 2011 from $35.2 trillion in 2009. Household wealth is the sum of all assets such as a home, car and stocks, minus all debts.

—The average wealth of the 8 million households in the most affluent 7% rose to an estimated $3.2 million from an estimated $2.5 million, while the average net worth of the 111 million households in the less affluent 93% fell to roughly $134,000 from $140,000.

—The upper 7% were the households with a net worth above $836,033 and the 93% represented households whose worth was at or below that. Not all households among the 93% saw a decline in net worth, but the average declined for that group.

—On an individual household basis, the average wealth of households in the more affluent group was almost 24 times that of those in the less affluent group in 2011. At the start of the recovery in 2009, that ratio was less than 18 to 1.

—During the study period, Standard & Poor's 500 stock index rose 34%, while the Standard & Poor's/Case-Shiller index for home prices fell 5%.

GE Slides as Power & Water Unit Saps Industrial Profit

Story originally appeared on Bloomberg.

General Electric Co. (GE) fell the most since 2011 after a first-quarter slide in its Power & Water business pulled total industrial earnings down 11 percent.

Profit at GE’s manufacturing businesses fell to $2.94 billion as sales slid 5.7 percent to $22.7 billion, the company said in a statement. The decline was led by a 39 percent drop in earnings at the power and water unit, which makes products including gas-powered and wind turbines.

“We planned for a continued challenging environment in Europe, but conditions weakened further,” Chief Executive Officer Jeffrey Immelt said in the statement, with manufacturing and service revenue in the region declining 17 percent.

The slide makes it tougher for the Fairfield, Connecticut- based company to achieve the industrial growth targeted in its full-year plan and emphasized in incentive-pay packages. The profit margin at GE’s industrial businesses contracted 71 basis points in the quarter, roughly the amount that Immelt had predicted they would grow in the full year.

“Industrial profits were much weaker than we expected,” said Jeff Sprague of Vertical Research Partners Inc., who has a hold rating on GE. There’s “substantial doubt” that the company can reach Immelt’s target now, he wrote.

GE’s 4.1 percent drop to $21.75 in New York was the largest decline since November 2011. The shares previously gained 8 percent this year, compared with an 8.1 percent advance for the Standard & Poor’s 500 Index.

Weaker Europe

The power and water division saw its margin shrink by 3.2 percentage points, the most of any unit. It will be hard for the business to equal its 2012 profit of $5.24 billion, Immelt said on a conference call with analysts.
“Europe was weaker than we expected, and in particular the power and water and oil and gas businesses were very soft,” Nick Heymann, an analyst at William Blair & Co. who has a market-perform rating on the stock, said in a telephone interview.

The company’s industrial revenue growth, excluding the effect of acquisitions, will probably be closer to the lower end of its 2 percent to 6 percent projection, Immelt said on the call. He reiterated the 70 basis point margin-growth target.

Aviation sales climbed 3.7 percent and transportation increased 12 percent. That boosted GE’s equipment and services backlog to a record $216 billion.

GE Capital’s earnings climbed 8.7 percent, driven by real estate advances.

NBC Sale

Companywide, adjusted profit from continuing operations rose 13 percent to $3.63 billion, or 35 cents a share, the company said. That matched the 35-cent average estimate of 13 analysts surveyed by Bloomberg.

The figure excludes gains from GE’s $18.1 billion sale of its stake in NBC Universal in February, which boosted profit by 4 cents per share, the company said.

Immelt has already begun to redeploy the proceeds, spending $3.3 billion to acquire Lufkin Industries Inc. (LUFK) and accelerating share buybacks.

Revenue in the quarter was little changed at $35 billion, GE said, topping the $34.6 billion average estimate in a Bloomberg survey of nine analysts.

Counting pension costs and discontinued businesses, GE’s net income rose 16 percent to $3.53 billion, or 35 cents a share, from $3.03 billion, or 30 cents, a year earlier.

Wednesday, April 24, 2013

Al Neuharth, founder of USA Today, longtime Gannett chief has died in Florida at 89

Story originally appeared on the Washington Post.

COCOA BEACH, Fla. — Al Neuharth changed the look of American newspapers when he founded USA Today, filling the newspaper with breezy, easy-to-comprehend articles, attention-grabbing graphics and stories that often didn’t require readers to jump to a different page.

Critics dubbed USA Today “McPaper” when it debuted in 1982, and they accused Neuharth, of dumbing down American journalism with its easy-to-read articles and bright graphics. USA Today became the nation’s most-circulated newspaper in the late 1990s.

The hard-charging founder of USA Today died Friday in Cocoa Beach, Fla. He was 89. The news was announced by USA Today and by the Newseum, which he also founded.

Jack Marsh, president of the Al Neuharth Media Center and a close friend, confirmed that he passed away Friday afternoon at his home. Marsh said Neuharth fell earlier this week and never quite recovered.

Sections were denoted by different colors. The entire back page of the news section had a colored-weather map of the entire United States. The news section contained a state-by-state roundup of headlines from across the nation. Its eye-catching logo of white lettering on a blue background made it recognizable from a distance.

“Our target was college-age people who were non-readers. We thought they were getting enough serious stuff in classes,” Neuharth said in 1995. “We hooked them primarily because it was a colorful newspaper that played up the things they were interested in — sports, entertainment and TV.”

USA Today was unlike any newspaper before it when it debuted in 1982. Its style was widely derided but later widely imitated. Many news veterans gave it few chances for survival. Advertisers were at first reluctant to place their money in a newspaper that might compete with local dailies. But circulation grew. In 1999, USA Today edged past the Wall Street Journal in circulation with 1.75 million daily copies, to take the title of the nation’s biggest newspaper.

“Everybody was skeptical and so was I, but I said you never bet against Neuharth,” the late Washington Post publisher Katharine Graham said in a 2000 Associated Press interview.

The launch of USA Today was Neuharth’s most visible undertaking during more than 15 years as chairman and CEO of the Gannett Co. During his helm, Gannett became the nation’s largest newspaper company and the company’s annual revenues increased from $200 million to more than $3 billion. Neuharth became CEO of the company in 1973 and chairman in 1979. He retired in 1989.

As Gannett chief, Neuharth loved making the deal. Even more so, the driven media mogul loved toying with and trumping his competitors in deal-making.

In his autobiography, “Confessions of an S.O.B.,” Neuharth made no secret of his hard-nosed business tactics, such as taking advantage of a competitor’s conversation he overheard.

He also recounted proudly how he beat out Graham in acquiring newspapers in Wilmington, Del. He said the two were attending a conference together in Hawaii, and he had already learned that Gannett had the winning bid, but he kept silent until he slipped her a note right before the deal was to be announced.

Small Business Owners Want Change on Obamacare

Story originally appeared on Fox News.

It's been three years since Obamacare was passed - and so far, the response from small business owners is a mixed bag.

On Wednesday, the House Small Business Committee heard testimony from small business owners and economic experts on effects of the law.

Rep. Sam Graves (R-MO)  opened the testimony saying Obamacare has had a negative effect on small businesses' perceived ability to grow and thrive in this economy. A U.S. Chamber of Commerce survey showed 75% of small businesses predict Obamacare will raise their costs; another survey by Newtek Business Services found 65% don't yet have a strategy for managing their health-care costs.

And just attempting to deal with the paperwork associated with the Affordable Care Act has hurt businesses, said Douglas Holtz-Eakin, Ph.D. and president of the American Action Forum. According to his calculations, the "ACA's red tape alone costs the U.S. approximately $4.9 billion annually, a figure that will grow as the pace of implementation quickens this year."

Small Businesses Speak Out
The small business owners at the hearing had mixed experiences with Obamacare, though they agreed that certain aspects should be changed for the good of companies across the country.
Kevin Tindall, owner of Tindall & Ranson Plumbing & Heating, said,
"The continued rise in the cost of providing health care insurance absolutely stifles my ability to create, provide and sustain job," said Tindall. "I have yet to understand how we as a nation can continue to state that we need to create more jobs, yet challenge, threaten or even ignore the very mechanisms for job creation."

Tindall said he experienced insurance renewal costs over 9% for both 2011 and 2012, and did not qualify for the small business tax credits, because the average salary at his company is over the $50,000 threshold.

Bill Gouldin, the president of Strange's Florists, Greenhouses and Garden Centers, already offered health insurance to full-time employees working over 37.5 hours per week - and was paying 100% of the premiums. But he says that the rising costs of doing so has kept wages down at his company.

Gouldin is concerned the mandate to provide insurance for employees working 30 or more hours per week will cause employers to cut hours or jobs altogether. He suggested lawmakers raise the cutoff to 37.5 hours per week.

At least one advocate of the Affordable Care Act agreed with Gouldin that changes should be made to the law.

Louisa McQueeney, the CFO of Palm Beach Groves, has already benefited from the act: She said her health insurance costs have been cut by 12%, thanks to tax credits, insurance rebates and flat renewals.

That said, McQueeney is dismayed that more small businesses aren't able to take advantage of the credit, since it's limited to businesses with fewer than 25 full-time employees and average wages under $50,000.

"Why not expand that FTE requirement to 50, 75 or even 100 employees, and increase the salary cap?," she said. "You have an opportunity to help so many more small businesses throughout the country with the small business health care tax credit."

Ackman may be eyeing exit as JC Penney bet in tatters

Story originally appeared on Fox News.

William Ackman's multiyear bet that he could overhaul ailing retailer JC Penney looks like it may end up being one of his $12 billion hedge fund's worst investment blunders.

On Monday, JC Penney's board dismissed Ron Johnson, a former Apple executive handpicked by Ackman to remake the retailer, and brought back Mike Ullman, whom Ackman has previously criticized.

Now the hedge fund manager is likely searching for his own quick exit from an investment that is costing his $12 billion Pershing Square Capital Management millions in losses and has tarnished his reputation, say industry analysts and investors.

Selling off parts or taking the company private would be ways to quit now that JC Penney's slumping stock price has cost Pershing Square some $500 million in paper losses, people familiar with the firm said.

"The faster Ackman and group sell JCP's valuable assets to someone else, the more value they will capture," said George Bradt, managing director of PrimeGenesis, an executive consulting firm. "The longer they stay distracted with sure-to-fail ideas like fixing the business or taking it private, the less value will be left when JCP finally ceases to exist."

Taking it private is also a viable way for Ackman to get out. Even before Pershing Square and Vornado Realty Trust showed up in 2010, private equity investors were circling.

Today, a purchase would be cheaper with the stock price near at $14 a share, down about six dollars a share from where Ackman started buying. And a deal would still be attractive for players like Blackstone Group , KKR & Co or Apollo Global Management LLC because JC Penney still has valuable real estate holdings, owning nearly half of its space and leasing the rest at $4 a square foot.

Ackman has long championed JC Penney's vast real estate holdings as one reason the company should be trading at a higher stock price. Joining the JC Penney board in 2011, he also said less than a year a ago that Pershing Square could make 15 times its money if Ron Johnson's ambitious turnaround plans worked.

But that strategy resulted in Johnson's dismissal, and his plans to upgrade the stores and merchandise is in tatters. Now Mike Ullman, the CEO Ackman forced out has been brought back from retirement to run the company, so there is little reason for an activist investor to stick around.

The usually voluble Ackman has yet to publicly comment on the management changes at JC Penney, and he did not respond to a request for comment for this story.

Shares of JC Penney rose almost 11 percent late Monday after Johnson had been ousted, but the stock fell when the company said Ullman was back, and continued its plunge on Tuesday, its shares down more than 10 percent in early afternoon trade.

"What we have now is clearly the worst case scenario and Bill will be looking to make as graceful an exit as quickly as possible," said one Pershing Square investor, who asked not to be named because he is not authorized to speak publicly.

Privately Ackman has long said the investment could be risky because it relied so heavily on shoppers liking Johnson's plan.

More stinging for Ackman personally may be that he appears to have been marginalized on a board that went back to the old boss, even though Ullman's tenure may not be long given that he has no employment contract.

"It appears the board is grasping for stability and the situation is more dire than outsiders realized," said Damien Park, the president of Hedge Fund Solutions, which tracks activist investors who push for management changes. "Ackman and the remainder of the board have a lot of work to do to demonstrate they're acting as a cohesive group."

One thing Ackman will likely not do is try to put the JC Penney investments into a side pocket the way some other hedge funds have done with their own poorly performing assets.

So far Pershing Square, which has strict liquidity conditions where investors need about two years to get their money back, has not been hit with heavy redemptions and the JC Penney investment is liquid enough to sell it off over time.

Pershing Square returned 6.1 percent during the first quarter even as JC Penney's stock was tumbling, suggesting that investors have no reason to run for the exits right now.

But the pick does cast a shadow over Ackman's record where average annual returns of 20 percent have made him a favorite with pension funds and other big investors.

The failure of Ackman's "candidate has resulted in substantially diminished credibility for him prospectively," said one investor who is not invested with Ackman but did not want to be named due to his continuing work in the hedge fund industry.

This does "not bode well for the board's receptivity to future recommendations. He is now a neutered activist," the person said.

Thursday, April 18, 2013

Jobs keep creeping out of downtowns

Story originally appeared on USA Today.

The recession put the brakes on job growth but did nothing to reverse a decades-long trend: job sprawl.

Despite the economic slump, the share of metropolitan areas' jobs farther from downtowns increased from 2000 to 2010, according to Brookings Institution research out Thursday. The share of jobs located in or near a downtown declined in 91 of the nation's 100 largest metropolitan areas.

"Job sprawl continued steadily," says Elizabeth Kneebone, author of the report and fellow at the Brookings Metropolitan Policy Program.

The number of jobs more than 10 miles and up to 35 miles from city centers increased 1.2% the last decade. The number of jobs 10 miles away or less fell.

In 2010, nearly twice the share of jobs (43%) were at least 10 miles from downtown as the share within 3 miles (23%). The share of jobs 10 to 35 miles from the city center grew in 85 of the metro areas.

But there are signs of a counter-current. As young professionals flock to city centers, companies that want the best and brightest are starting to follow, says Joe Cortright, senior research adviser for CEOs for Cities, a national organization of urban leaders. "Suburban office locations are not as attractive as they once were," he says. "A big factor is gas prices."

He points to Swiss financial giant UBS, which just moved its trading floor from suburban Connecticut to Manhattan to be closer to where younger workers live. Biotech company Biogen Idec is moving from its suburban campus in Weston, Mass., to Cambridge, just outside Boston. In metro Atlanta, game developer CCP Games moved from a suburban office park in Stone Mountain, Ga., to downtown Decatur, a more urban area with transit access. Pinterest moved from Palo Alto, Calif., to San Francisco.

"I don't expect it to go back to the way it was," Cortright says.

The downturn couldn't reverse job sprawl, and "Without policy action, there is no reason to believe it would reverse," Kneebone says.

Highs and lows in job sprawl:

The industrial Midwest leads the way, with Detroit (77% of jobs in far-flung suburbs) and Chicago (67.4%).

Lowest job sprawl among large metros: San Jose, where almost two-thirds of jobs are within 3 miles of downtown.

Among smaller metros, Memphis, Knoxville, Tenn., and Worcester, Mass., have the highest share of jobs farther out. Bridgeport, Conn., is the most centralized, followed by Honolulu and Allentown, Pa.

The Phoenix metro had the largest jump (10.8%) in the share of jobs on the outer edge.

Suburbanization doesn't have to equal sprawl, Kneebone says. Many areas, such as the Virginia suburbs of Washington, D.C., are becoming dense urban job centers near housing and rail lines. More than three-fourths of jobs in metro Los Angeles are in high-density areas outside the city center.

Tuesday, April 16, 2013

The cost of owning your car? $9,000 a year

Story originally appeared on USA Today.

The average owner of a sedan has to shell out nearly $10,000 a year to own and operate that car, according to auto club AAA.

A new AAA reports shows, on average, the cost of driving 15,000 miles a year rose 1.17 cents to 60.8 cents per mile, or $9,122 per year. Overall, that's a roughly 2% increase on the cost of operating a car last year.

Auto club AAA studies five cost categories – maintenance, fuel, tires, insurance and depreciation – for its annual "Your Driving Costs" study.

The biggest percentage increase this year was in maintenance costs, which grew by 11.26% to 4.97 cents per mile, on average, for sedan owners. Average costs in all categories are lower for smaller vehicles and higher for bigger ones.

The maintenance cost estimates are based on the cost to maintain a vehicle and perform needed repairs for five years and 75,000 miles, including labor expenses, replacement part prices and the purchase of an extended warranty.

"As a vehicle gets older you tend to encounter more significant repair costs," says Michael Calkins, AAA's manager of technical services.

Since last year's study, there were substantial increases in labor and parts costs for some models, and a significant rise in the price of extended warranties. "People are keeping cars longer," Calkins says. "Extended warranties are seeing a bit of an increase in claims. That's where the costs have gone up."

The second biggest increase: Insurance costs, which rose 2.76%, or $28, to an annual average of $1,029. AAA's insurance cost estimates are based on a low-risk driver with a clean driving record.

Fuel costs rose 1.93% to 14.45 cents per mile for the average sedan owner. The actual average cost of regular gas went up 3.84% to $3.49 per gallon; but several of the vehicles in the AAA study had small improvements in fuel efficiency, which partially offset the fuel cost increase.

Depreciation costs, which had dropped in last year's study, ticked upward slightly, by .78% to $3,571 a year. That might be because, as new vehicle sales recover, more used cars are available, which has softened the resale value of clean older models, Calkins says.

"The length of time people keep cars has been going up for the past several years, since the real estate crash," he says. "The average age of the vehicle on the road now is 11.1 years. It's not just for financial reasons that people are keeping cars long. The quality of the cars is also improving."

Tire costs did not change from last year, remaining at about one cent per mile, on average, for sedan owners.

AAA has published "Your Driving Costs" since 1950. That year, gas cost 27 cents a gallon, and it cost about 9 cents a mile to drive 10,000 miles a year.

Monday, April 15, 2013

Cut costs and make home improvement pay off

Story originally appeared on USA Today.

Spring has sprung and home improvement is on the minds of many Americans who – according to a Harvard University Joint Center for Housing Study -- are spending more on home improvement.

Indeed, 72% of homeowners have at least one home improvement project on their to-do list this year, expecting to spend an average of $4,000, according to an Echo Research survey conducted on behalf of American Express.

So, how can you get the most bang for your home improvement buck? Here are six tricks of the trade from BankRate.com:

1. Think of your home like a car. Give it regular maintenance before costly repairs sneak up.

2. Consider used tools instead of new. You can often snag them at yard sales and at auctions. Farm auctions are an amazing source for mowers. FarmersAdvance.com has a calendar of upcoming events.

3. In some cases you can save hundreds – even thousands – of dollars by renting versus buying tools like power paint sprayers, scaffolding and platforms.

4. Invariably there's a screw or two left over after every project. Keep things like nails and screws organized in a plastic bag or mason jar, so you can find them fast next go-around without having to purchase dozens when you only need one or two.

5. There are probably some places you don't need to be real picky about paint. If so, consider the "oops" bin, where custom colors someone didn't end up buying may be. Local municipalities and waste management departments may have paint they'd love for you to take off their hands for free. And, go for as few coats as possible.

6. Lastly, keep things dry. Moisture is a real culprit in prompting pricey fixes. Make sure your heating and air conditioning system is well maintained. And consider investing in a dehumidifier.

When all is said and done, what kind of return can you expect on your home improvement investment?

In their annual Cost vs. Value reports, Remodeling magazine and the National Association of Realtors estimate improvement projects on average return nearly 61% of the cost in terms of higher home values. So, you won't get it all back, but it's a decent return on investment if the repairs fit your budget.

Tax Day freebies range from snacks to sex toys

Story originally appeared on USA Today.

Many consumers hate Tax Day, so marketers can come off as heroes when they offer freebies or deals to help folks deal with the stress.

Tax Day isn't just a pain in the wallet. It also sucks up gobs of time and emotions.

Which explains why so many marketers are embracing it as a day when they can play the hero with acts of kindness — such as handing out freebies. Big names from Arby's to Office Depot will be doling out everything from Tax Day snacks to free printing. Even Trojan — yes, that Trojan — is getting in the Tax Day freebie mix.

Most of the Tax Day freebies and deals have social-media tie-ins that require some sort of coupon.

"People hate Tax Day," says Erika Napoletano, brand strategist with RHW Media. "If a brand can come across as the good guy, the brand wins. It's all about audiences feeling as if they're understood."

STILL HAVEN'T FILED?: Get the latest tax news and advice

Some Tax Day promos are freebies — others are deals. Some are limited to April 15, while others stretch through the whole month of April. (Please check brand Facebook pages or websites for details). Among this year's goodies:

  • Snacks. Great American Cookies will hand out thousands of its new birthday cookies to lure consumers to stores "on a day they might not have planned to go," says Jenn Johnston, marketing chief.

Bruegger's Bagels will sell a box of 13 bagels for $10.40 (a "deduction" of nearly $3.50 per box). Last year, it sold more than 10,000 of the Big Bagel Bundles, says Judy Kadylak, director of marketing.

Arby's will hand out free Value Curly Fries or free Potato Cakes. It expects to redeem 34,000 coupons, says Bob Kraut, senior vice president of brand marketing.

Boston Market will sell a two-fer of its new rib meals for $10.40. (Essentially, one meal is free.) The name for it: We Love the IRS (Incredible Rib Special) program.

Cinnabon will hand out two free, bite-size Cinnabon Bites per customer. Last year more than 60,000 were given out. "We want to get the word out on our lesser-known treats," says President Kat Cole.

  • Printing. Consumers can print up to 25 black-and-white pages and do up to 5 pounds of shredding for free at Office Depot. When folks stop by, it also hopes to sell them file folders, storage boxes and shredders, notes Randy Wick, vice president of merchandising.
  • Massages. HydroMassage is offering freebie 10- to 15-minute massages at hundreds of fitness centers. "People need the stress relief" at tax season, says Paul Lunter, president.
  • Sexual aids. No one has a wackier Tax Day stunt than Trojan, which will hand out Trojan vibrators (worth up to $39.99) at "Pleasure Carts" in San Francisco and Los Angeles, says Bruce Weiss, vice president of marketing. "It's a stimulus package they will never forget."

Six automakers recall 3.4 million vehicles worldwide over faulty air bags

Story originally appeared on the Detroit News.

Washington — A massive recall by six automakers for air bags that could catch fire or send metal fragments flying won't expand to other automakers.

The recall of 3.4 million vehicles worldwide, including more than 1 million in the U.S., is caused by a single faulty part in air bags built a decade ago in Washington State. It's the latest example of what can happen when common parts are shared among automakers.

Toyota Motor Corp., Honda Motor Co., Nissan Motor Co, Mazda Motor Co., General Motors Co. and BMW AG are recalling 3.4 million vehicles because of a faulty air bag part produced by Takata, the automakers said Thursday. Takata said no other automakers were affected.

Toyota is recalling 1.7 million vehicles worldwide, including 510,000 in the U.S. They include these 2001-03 models: Toyota Corolla, Matrix, Sequoia and Tundra; and the Lexus SC 430.

GM said it planned to recall 48,000 2003 Pontiac Vibes in the United States, and another 7,000 in Canada. The Vibe was assembled at a joint GM-Toyota facility.

Toyota said its investigation was prompted after learning about a fire in an instrument panel in a 2011 crash involving a faulty air bag inflator.

In 2012, the automaker received three reports of fractured inflator parts in U.S. vehicles. Toyota said it believes just 170,000 of the U.S. vehicles will need repairs, but all 510,000 will have to be inspected.

U.S. auto safety officials are keeping a close eye on the issue.

The National Highway Traffic Safety Administration said it has been in communication with Takata and the automakers. "The agency will continue to monitor the situation closely and will take appropriate action as warranted," NHTSA said.

Honda is recalling 561,000 vehicles in the U.S.: the 2001-03 Civic, 2002-03 CR-V and 2002 Odyssey. Honda said it became aware of a ruptured passenger air bag in Puerto Rico in October 2011 and began investigating. It will begin notifying owners of the recall next month.

"It is possible that the passenger front air bag inflators in affected vehicles may deploy with too much pressure, which may cause the inflator casing to rupture and could result in injury," the automaker said. "Honda is aware of one crash in which a passenger front air bag deployed with too much pressure, causing the casing to rupture. Honda is not aware of any injuries or deaths related to this issue."

Nissan is recalling about 480,000 Nissans and Infinitis worldwide. About 265,000 are in the United States: the 2001-03 Nissan Maxima, Pathfinder and Sentra; and the Infiniti FX and QX4.

Mazda is recalling just 149 vehicles in the U.S. — some 2003-04 Mazda6 and 2004 RX-8 vehicles.

Michelle Krebs, senior analyst at automotive research site Edmunds.com, said the recall shows the impact of using common parts.

"This recall is an example of one of the downsides of using 'super suppliers' for important vehicle components," she said.

Takata, which has a major presence in southeast Michigan and its headquarters in Auburn Hills, said it is aware of six incidents worldwide: two in Japan and four in the U.S. The company said there have been no injuries.

Takata told the National Highway Traffic Safety Administration that it also provided faulty inflators to BMW AG, though it is not clear how many vehicles might be impacted, the German automaker said.

The Japanese auto supplier's stock fell 9 percent in Tokyo on the recall news, after falling as much as 15 percent.

Takata said the problem was primarily caused by a faulty manufacturing process at its Moses Lake, Wash., plant.

The machine at issue was modified by at least September 2002. Takata also said some air bag parts may have been exposed to moisture at its plant in Moncolva, Mexico.

Over the last year, more than 3 million vehicles have been recalled for faulty air bags in the U.S.

EA confirms layoffs as it seeks new CEO

Story originally appeared on USA Today.

Video game publisher Electronic Arts confirmed it will lay off an undisclosed number of employees as it continues its search for a new CEO.

In a statement released Thursday, EA says the "streamlining" is part of an effort to transform in an industry experiencing significant change with the rise of smartphones and tablets as well as the impending arrival of fresh home video game consoles.

"EA is sharpening its focus to provide games for new platforms and mobile," reads a statement from the publisher. "In some cases, this involves reducing team sizes as we evolve into a more efficient organization. These are difficult decisions to let go of good people who have made important contributions to EA, and whenever possible we retrain or relocate employees to new roles."

The publisher did not reveal how many employees were affected.

The layoffs follow the departure of CEO John Riccitiello, who stepped down on March 30 after assuming the role in 2007. "I am proud of what we have accomplished together, and after six years I feel it is the right time for me pass the baton and let new leadership take the Company into its next phase of innovation and growth," said Riccitiello when announcing his exit last month.

Former CEO Larry Probst will take over as interim CEO until a replacement has been hired.

The transition at EA arrives as the video game industry prepares for a new wave of home video game consoles. In February, Sony unveiled the PlayStation 4, while reports suggest Microsoft will share the first details of its next Xbox console in May.

More details will likely be revealed at video game industry showcase E3, the Electronic Entertainment Expo, in Los Angeles in June.

Wednesday, April 10, 2013

Avon plans to cut 400 jobs, exit Ireland

Story originally appeared on MarketWatch.

NEW YORK (MarketWatch) -- Avon Products Inc. shares were little changed on Monday as the direct seller of beauty products said it's cutting 400 jobs worldwide as part of its previously disclosed initiative to cut $400 million in costs by 2016. The company said it also plans to restructure or close in several smaller, underperforming markets primarily in Europe, Middle East and Africa, including getting out of Ireland. Avon said charges tied to the latest round of restructuring moves will total $35 million to $40 million pretax.

Tuesday, April 9, 2013

Investments for the unemployed

Story originally appeared on USA Today.

Ask Matt

Q: I'm unemployed. What stock should I buy?

A: Retirement and college are common financial goals. Now, preparing for the risk of unemployment is another.

With unemployment stubbornly high, some investors are adjusting traditional views of what stocks or investments are appropriate when income dries up. Unemployed investors need to create income to make up for their lack of a salary. But lacking job income, you can't afford to take on risk that might blow out your portfolio.

For example, in your e-mail you asked if Home Depot is an appropriate investment while you're out of work. The answer is: No.

Home Depot is a large company, yet the stock is volatile. The company's earnings and revenue are closely tied to the ups and downs of the housing market. That's dangerous, because when housing is down, the job market could be, too.

Instead, you first want to make sure you have enough cash to hold you over while you search for a job. This money is for emergencies and should be nowhere near the stock market.

Money that remains to be invested is best placed in a mix of diversified investments in large-cap stocks and bonds. Doing this will at least reduce your exposure to a company-specific problem at a time when you can least afford it.

Johnson out, ex-CEO Ullman in at J.C. Penney

Story originally appeared on USA Today.

Ron Johnson steps down as CEO of troubled J.C. Penney

It's back to the future for troubled retailer J.C. Penney, which announced late Monday that CEO Ron Johnson would be replaced on an interim basis by Mike Ullman, the retailer's former chief executive.

Johnson, 54, was hired in late 2011 from Apple, where he led the company's highly successful retail store chain. But his plans to reinvigorate the chain from staid retail dinosaur into a fashion-forward, hipper brand stumbled early when he decided that the chain would abandon sales and coupons for an every day low price strategy - alienating long-time customers. His last few months were marked by slumping holiday sales, a battle with rival Macy's over home fashion maven Martha Stewart and increasing shareholder unrest over Penney's slumping stock price.

CAN THIS COMPANY BE SAVED?: And is Ullman the man to do it?

J.C Penney shares sank 44% last year -- Johnson's first full year as CEO -- and had slumped another 25% through last week. Word of his departure pushed the stock up 9% in after hours trading. But that was before news that Ullman -- CEO from 2004 to 2011 -- was returning. The stock was down 6% to $15.25 in later after-hours trading.

In a Monday filing, the retailer said Jonson was "stepping down" and was being replaced by Ullman, 66, effective immediately.

Hedge fund manager Bill Ackman, a Penney director and the company's largest shareholder, recruited Johnson from Apple. But Ackman had been increasingly critical of Johnson's strategy, saying he had made critical moves without adequately testing their potential.

Ullman is not viewed as a long term replacement. He has no employment contract, but will be paid $1 million a year. It's also unclear what will happen to key execs Johnson hired after becoming CEO in October 2011.

In a company filing released last week, it was revealed that Johnson's pay package at the beleaguered company had plunged 96%.

Johnson received a 2011 stock grant worth $52.7 million when he was hired to reinvigorate the retailer. But he received just $1.9 million in his first full year at the company.

J.C.Penney is in a protracted legal fight with rival Macy's and its CEO Terry Lundgren over selling goods under Martha Stewart's brand. Earlier Monday, attorneys for the squabbling chains were in court for mediation after three weeks of testimony from witnesses including the domestic diva herself, Johnson and Lundgren.

In February, the company reported an adjusted fourth-quarter loss of $427 million, or $1.95 a share, far below Wall Street estimates. For the full year, Penney lost $985 million, or $4.49 a share.

In last week's proxy filing the company's board acknowledged tough times.

"The company underwent tremendous change as we began shifting our business model from a promotional department store to a specialty department store," Penney said in its proxy. "Fiscal 2012 was tougher than expected."

Penney had said its turnaround strategy under Johnson was a multi-year process. But now, it appears will be searching for a new CEO with a different approach.

Retail guru Kathy Gersch of Kotter International says "the patience ran out and the money ran out" for Johnson's strategies.

"He pulled some bold moves pretty quickly. Most were taking them in the wrong direction without a clear sign of when they might get traction," Gersch said.

Johnson's decision on everyday pricing was misguided, critics say.

"This was one large test that failed and we all learned something in retail we already knew, that the consumer is ultimately in control of this process and you can't disregard her," says Ellis Verdi, president of ad agency Devito/Verdi. "He took away the control. The consumer wants that control, to know they're getting a great deal.

Now, the struggling retailer needs to work on reestablishing consumer value, a strategy it has begun returning to. But it remains in a tough spot, Verdi says.

"JC Penney at its best is still not great," Verdi says. "That's the bigger issue. It's still an old brand."

So who will eventually step in long term?

Retail analyst Jennifer Black won't venture a guess, but says it is likely Penney will seek a seasoned veteran with big store management expertise.

"These big box stores aren't the same as these smaller Apple stores," Black says. The company will "look for somebody who has experience in running a big box store that's multi-faceted with all these different kinds of departments."

George Bradt of PrimeGenesis, which helps executives transition into new jobs, says he wouldn't recommend anyone take the job of CEO.

"I think it's over for them,'' Bradt says. "I'm not sure the brand name has any value. If someone came to me and said what advice do you have, I'd tell them not to take the job. The best thing Ullman can do is get rid of the company and sell the assets."

Monday, April 8, 2013

Dental franchises show steady growth

Story originally appeared on USA Today.

Great Expressions Dental Centers, which has 200 offices nationwide, is one example.

DETROIT -- At some 60 Great Expressions dental offices in Michigan -- and 140 more nationwide -- the profits from filling cavities and getting braces for the kids ultimately help to fund the retirement of hundreds of thousands of municipal workers in Canada.

Great Expressions Dental Centers, founded in Michigan and headquartered in Bloomfield Hills, is an impressive growth story, with about $275 million in annual revenue and a spot on Inc. magazine's list of America's fastest-growing private companies. About 600 of the firm's 2,300 employees, including dentists and hygienists, are in Michigan.

That growth is being fueled by a fast-moving industry trend toward consolidation of dental practices. The demand for legal services related to dental practice counsel and other business acquisition consultants is also increasing.

Indeed, the Great Expressions track record was so attractive that OMERS Private Equity, a unit of the giant $55 billion Ontario Municipal Employees Retirement System, bought a controlling interest in Great Expressions in October 2011. The return on OMERS' investments is what pays for the pensions of about 420,000 Canadians.

Rich Beckman, CEO of Great Expressions since 1998 when the firm had about 25 offices, said the evolving business model and growth strategy allows dentists and hygienists to focus full-time on patient care, while businesspeople like him handle the financial and administrative aspects of running a complex, highly regulated health care enterprise.

"We accept all insurance plans. We want to be the patients' dentist for life, we want them to come to us for all their family care, their kids' braces, and we do that by trying to have reasonable prices," Beckman said.

Great Expressions is one of about 20 large dental service organizations (DSOs) in the U.S., doing a combined $6 billion to $7 billion worth of dentistry, Beckman said. That's still only a small slice of a fragmented, $110 billion-a-year industry. Many companies that are acquiring dental practices are also buying vet practices. If you need the services of a veterinary practice counsel consider Mandelbaum Salsburg in West  Orange, New Jersey.

This corporate intrusion into a field long dominated by solo practitioners is not without some controversy. Some Internet sites are peppered with gripes that DSOs pressure dental staffs to boost patient volumes, and a few large DSOs outside Michigan have been accused of performing expensive, unnecessary procedures on children covered by Medicaid.

Beckman said any undue pressure on dentists and hygienists to rush through appointments or do unnecessary procedures to boost revenue would be counterproductive by destroying long-term family loyalty to the brand.

Mert Asku, dean of the school of dentistry at the University of Detroit Mercy, said several factors are driving the trend toward corporate consolidation in dentistry:

The industry is graduating fewer students.

A growing number of those new dentists are women, 34% of whom don't practice full-time during the first 20 years of their careers.

Back office complexity related to billing, insurance and regulation is ever-increasing.

The rising cost of education means newly minted dentists are graduating with $200,000 to $250,000 of education debt at a time when the credit crisis has made financing more difficult for a solo practice.

"Great Expressions," Asku said, "hires a lot of our alums, because they are practice-ready when they graduate."

Dr. Walter Knysz Jr., a University of Detroit grad, founded Great Expressions in 1982 and sold the last of his stake in the 2011 OMERS deal. Last year, he founded a new entity, Unified Smiles, also based in Bloomfield Hills, to provide various support services to independent dental practices.

For Beckman, the goal at Great Expressions is to keep growing annual revenue to about $500 million, mostly by acquisition. He has about 15 company-built stores, including a new location in Midtown Detroit.

And why build there? "I wanted a location here as soon as I heard Whole Foods was coming to the area," Beckman said, referring to the market slated to open in June. "We want to be part of what's going on here in Detroit."

Just as he wants to keep taking the business model on the road, to Great Expressions locations in Florida, Georgia, New York and other frontiers.

No TV? 5 million U.S. households bid boob tube goodbye

Story originally appeared on USA Today.

LOS ANGELES (AP) — Some people have had it with TV. They've had enough of the 100-plus channel universe. They don't like timing their lives around network show schedules. They're tired of $100-plus monthly bills.

A growing number of them have stopped paying for cable and satellite TV service, and don't even use an antenna to get free signals over the air. These people are watching shows and movies on the Internet, sometimes via cellphone connections. Last month, the Nielsen Co. started labeling people in this group "Zero TV" households, because they fall outside the traditional definition of a TV home. There are 5 million of these residences in the U.S., up from 2 million in 2007.

Winning back the Zero TV crowd will be one of the many issues broadcasters discuss at their national meeting, called the NAB Show, taking place this week in Las Vegas.

While show creators and networks make money from this group's viewing habits through deals with online video providers and from advertising on their own websites and apps, broadcasters only get paid when they relay such programming in traditional ways. Unless broadcasters can adapt to modern platforms, their revenue from Zero TV viewers will be zero.

"Getting broadcast programming on all the gizmos and gadgets — like tablets, the backseats of cars, and laptops — is hugely important," says Dennis Wharton, a spokesman for the National Association of Broadcasters.

Although Wharton says more than 130 TV stations in the U.S. are broadcasting live TV signals to mobile devices, few people have the tools to receive them. Most cellphones require an add-on device known as a dongle, but these gadgets are just starting to be sold.

Among this elusive group of consumers is Jeremy Carsen Young, a graphic designer, who is done with traditional TV. Young has a working antenna sitting unplugged on his back porch in Roanoke, Virginia, and he refuses to put it on the roof.

"I don't think we'd use it enough to justify having a big eyesore on the house," the 30-year-old says.

Online video subscriptions from Netflix Inc. and Amazon.com Inc. — which cost less than $15 a month combined — have given him and his partner plenty to watch. They take in back episodes of AMC's The Walking Dead and The CW's Supernatural, and they don't need more, he says.

He doesn't mind waiting as long as a year for the current season's episodes to appear on streaming services, even if his friends accidentally blurt out spoilers in the meantime. With regular television, he might have missed the latest developments, anyway.

"By the time it gets to me to watch, I've kind of forgotten about that," he says.

For the first time, TV ratings giant Nielsen took a close look at this category of viewer in its quarterly video report released in March. It plans to measure their viewing of new TV shows starting this fall, with an eye toward incorporating the results in the formula used to calculate ad rates.

"Our commitment is to being able to measure the content wherever it is," says Dounia Turrill, Nielsen's senior vice president of insights.

The Zero TV segment is increasingly important, because the number of people signing up for traditional TV service has slowed to a standstill in the U.S.

Last year, the cable, satellite and telecoms providers added just 46,000 video customers collectively, according to research firm SNL Kagan. That's tiny when compared to the 974,000 new households created last year. While it's still 100.4 million homes, or 84.7% of all households, it's down from the peak of 87.3% in early 2010.

Nielsen's study suggests that this new group may have left traditional TV for good. While three-quarters actually have a physical TV set, only 18 percent are interested in hooking it up through a traditional pay TV subscription.

Zero TVers tend to be younger, single and without children. Turrill says part of the new monitoring regime is meant to help determine whether they'll change their behavior over time. "As these homes change life stage, what will happen to them?"

Cynthia Phelps, a 43-year-old maker of mental health apps in San Antonio, Texas, says there's nothing that will bring her back to traditional TV. She's watched TV in the past, of course, but for most of the last 10 years she's done without it.

She finds a lot of programs online to watch on her laptop for free — like the TED talks educational series — and every few months she gets together with friends to watch older TV shows on DVD, usually "something totally geeky," like NBC's Chuck.

The 24-hour news channels make her anxious or depressed, and buzz about the latest hot TV shows like "Mad Men" doesn't make her feel like she's missing out. She didn't know who the Kardashian family was until she looked them up a few years ago.

"I feel absolutely no social pressure to keep up with the Joneses in that respect," she says.

For Phelps, it's less about saving money than choice. She says she'd rather spend her time productively and not get "sucked into" shows she'll regret later.

"I don't want someone else dictating the media I get every day," she says. "I want to be in charge of it. When I have a TV, I'm less in control of that."

The TV industry has a host of buzz words to describe these non-traditionalist viewers. There are "cord-cutters," who stop paying for TV completely, and make do with online video and sometimes an antenna. There are "cord-shavers," who reduce the number of channels they subscribe to, or the number of rooms pay TV is in, to save money.

Then there are the "cord-nevers," young people who move out on their own and never set up a landline phone connection or a TV subscription. They usually make do with a broadband Internet connection, a computer, a cellphone and possibly a TV set that is not hooked up the traditional way.

That's the label given to the group by Richard Schneider, the president and founder of the online retailer Antennas Direct. The site is doing great business selling antennas capable of accepting free digital signals since the nation's transition to digital over-the-air broadcasts in 2009, and is on pace to sell nearly 600,000 units this year, up from a few dozen when it started in 2003.

While the "cord-nevers" are a target market for him, the category is also troubling. More people are raised with the power of the Internet in their pocket, and don't know or care that you can pull TV signals from the air for free.

"They're more aware of Netflix than they're aware over-the-air is even available," Schneider says.

That brings us to truck driver James Weitze. The 31-year-old satisfies his video fix with an iPhone. He often sleeps in his truck, and has no apartment. To be sure, he's an extreme case who doesn't fit into Nielsen's definition of a household in the first place. But he's watching Netflix enough to keep up with shows like Weeds, 30 Rock, Arrested Development, Breaking Bad, It's Always Sunny in Philadelphia and Sons of Anarchy.

He's not opposed to TV per se, and misses some ESPN sports programs like the X Games.

But he's so divorced from the traditional TV ecosystem it could be hard to go back. It's become easier for him to navigate his smartphone than to figure out how to use a TV set-top box and the button-laden remote control.

"I'm pretty tech savvy, but the TV industry with the cable and the television and the boxes, you don't know how to use their equipment," he says. "I try to go over to my grandma's place and teach her how to do it. I can't even figure it out myself."

Friday, April 5, 2013

Domino's sees sales boost from cold weather

Story originally appeared on the Guardian.

The UK's largest pizza delivery firm Domino's has reported buoyant sales in the first three months of the year, as consumers trapped indoors by the cold weather turned to fast food sent direct to their doors.

Sales in Domino's 670 UK stores were up 6.6% in the first quarter of 2013 compared with the same period last year, the company reported, attributing strong growth in part to new products, such as a hot-dog stuffed crust pizza, as well as 'buy one get one free' offers.

The pizza delivery firm did a roaring trade in the cold snap, shaking off the effects of snowfall that had previously hit sales. During the first seven weeks of 2013, when heavy snowfsnarled up traffic in many parts of the country, sales growth was 1.7%, but rose to over 12% in final six weeks of trading.

"All in all it was a very strong end to the quarter," said Lee Ginsberg, Domino's chief financial officer. "Some of the really cold weather has been keeping people indoors."

Domino's also reported that it now makes 62% of UK sales via the internet, up from 50% one year ago. Pizza lovers are increasingly using their smart phones to place their orders and tapped in £82.4m of orders via mobile devices in the first quarter.

Ginsberg said some stores had made 80% of their sales online during online promotions, which "shows where the future is".

Domino's expansion shows no sign of slowing and the company confirmed plans to open 60 new outlets in the UK this year, as well doubling its franchises in Germany, taking the store count to 36.

The company reported that sales in six "mature" stores in Germany rose 40% in the first quarter from a low base. The German business is not expected to be profitable until 2015.

Monday, April 1, 2013

McConnell: ObamaCare fails to keep promises

Story originally appeared on USA Today.

New study shows higher health care costs. Law needs to be pulled out by its roots.
The non-partisan Society of Actuaries last week said that because of Obamacare, insurers could pay an average of 32% more for medical claims. Those costs will be passed onto those who buy insurance on the individual market in the form of dramatically higher premiums.

The new report is further proof that this law is failing to deliver on its promises --and that the opponents were right to be skeptical. According to the new study, medical cost increases in my home state of Kentucky could be as high 34%. In states such as Wisconsin and Ohio, the actuaries predict an 80% increase. This will be a crushing financial blow to hardworking families across the country who are just scraping by as it is.

With wages stagnant and gas and tuition prices skyrocketing, these premium increases will be especially devastating for middle-class families. Obamacare would also be a threat to American jobs. This was recently confirmed by the Federal Reserve, when it said that employers are now citing the law as a chief reason for planned layoffs and a reluctance to hire.

Democrats ignored these warnings of unintended consequences. As then-Speaker of the House Nancy Pelosi famously put it at the time, we'd "have to pass the bill so you can find out what is in it". The result of that irresponsible approach has been even worse than any of us imagined. Earlier this month, the Obama administration issued some 848 pages of Obamacare regulations -- in a single day.

This means there are now nearly 20,000 pages of regulations associated with this law. No wonder applying for Obamacare will be as complicated as doing taxes. One draft application is more than 60 pages long.

During the health care reform debate, most Americans I spoke with acknowledged that our health care system was far from perfect. These people wanted reform, but they wanted the right reforms, not some grand scheme that increased our debt, expanded the government, raised premiums, killed jobs and forced Americans off the plans they currently have and like. However, the latter is just what they got.

The more we learn about Obamacare, the clearer it becomes that there is just no way to fix it. It costs way too much, and it's not working the way they said it would. If we have any hope of fixing the U.S. health care system without crippling our economy in the process, Obamacare must be pulled out by its roots. Only then will we be able to start over with common-sense reforms that actually improve the quality of care and lower costs for individuals and families across the country.

What Americans need and want is something that Obamacare sorely lacks -- a little legislative humility. Washington shouldn't pretend that it has a magic wand to waive that will solve something as complex as health care. When you try that, what you get is 2,000-page laws and 10 times that in new regulations, which make things worse.

Washington needs to listen more and dictate less. That means freeing states from costly mandates, allowing them to innovate, and encouraging them to work together to lower costs. Now more than ever, the answer is to repeal and replace.

Mitch McConnell of Kentucky is the Senate Republican Leader.

Judge to announce if Stockton will become most populous US city to enter bankruptcy

Story originally appeared on FOX News.

For the people of Stockton, a federal judge's anticipated decision Monday on the city's bankruptcy petition will affect their day-to-day lives for decades to come.

But the Chapter 9 bankruptcy case also is being closely watched nationally for the potential precedent-setting implications: whether federal bankruptcy law trumps the California law that says debts to the state pension fund must be honored.

After a three-day trial last week, U.S. Bankruptcy Judge Christopher Klein is to decide whether Stockton becomes the most populous city in the nation to enter bankruptcy, despite the objection of creditors who argued the city failed to pursue all other avenues for straightening out its financial affairs.

If it receives bankruptcy protection, the city begins a months-long process of negotiations over debt repayment that some say could end up in the U.S. Supreme Court.

"This case is worthy because of the conflict between the U.S. Bankruptcy Code and the state statutes governing CalPERS and the importance of the issue being decided," said attorney Karol Denniston, a municipal restructuring expert who monitored the trial.

The $900 million Stockton owes to the California Public Employees' Retirement System to cover pension promises is its biggest debt --as is the case with many struggling cities across California. So far Stockton has kept up with pension payments while it has reneged on other debts, maintaining that it needs a strong pension plan to retain its pared-down workforce.

The creditors who challenged Stockton's bankruptcy petition are the bond insurers who guaranteed $165 million in loans the city secured in 2007 to pay its contributions to CalPERS. That debt got out of hand as property tax values plummeted during the recession, and money to pay the pension obligation fell short.

Attorneys for the creditors argued that it was unfair for them to be paid 17-cents on the dollar for the loans while the retirement fund negotiated in flush times remains untouched.

Legal observers expect the creditors aggressively to challenge Stockton's repayment plan in the next phase of the process.

"That's where it will be precedent-setting. Does bankruptcy code apply to CalPERS or not? If bankruptcy code trumps state law, then that's huge and it has huge implications in terms of what happens next for other municipalities across California," said Denniston.

The city of nearly 300,000 has become emblematic of both government excess and of the financial calamity that resulted when the nation's housing bubble burst. Its salaries, benefits and borrowing were based on anticipated long-term developer fees and increasing property tax revenue. But those were lost in a flurry of foreclosures beginning in the mid-2000s and a loss of 70 percent of the city's tax base.

By 2009 Stockton had accumulated nearly $1 billion in debt on civic improvements, money owed to pay pension contributions and the most generous health care benefit in the state -- coverage for life for all retirees plus a dependent, no matter how long they had worked for the city.

Since cities can't be liquidated, Stockton has attempted to restructure some debt by renegotiating labor contracts and cutting the health benefit for retirees, but creditors argued that by ignoring bond debt they haven't created a plan that shares the pain equitably, as required under bankruptcy code.

Attorney Guy Neal, who represents creditors, spent a good deal of his trial time showing that for years Stockton had granted bloated labor contracts and benefits, and then allowed employees to boost their retirement benefits further by cashing out vacation time and sick leave in their last year of employment, thus raising their benchmark annual salary for retirement benefit purposes.

He argued that employees who shared in the wealth during good times should have to equally share the pain now, including cuts to CalPERS.

"The city simply wants to wipe out its debt but hold onto the benefits that the proceeds of that debt provided," Neal argued.

Stockton's City Manager Bob Deis testified that CalPERS is a trustee for city employees, not a creditor.

Judge Klein indicated at several points during the trial that the CalPERS attorney monitoring the case would have his time to speak during the repayment phase of the trial, an indication that the pension obligation could be a part of discussions.

"I know that issue is downstream, if we wind up going downstream," Klein said during closing arguments.

The state pension plan manages $255 billion in assets today but was underfunded by $87 billion in 2011, the last time calculations were made. CalPERS is in the process of setting new rates to close the liability, said spokeswoman Amy Norris, which could further strain cities in financial peril such as San Bernardino, San Jose Compton, Fairfield, Watsonville, Atwater and at least two dozen other cities.

"Just about everybody has an unfunded liability," said Norris.

Attorneys watching the case expect that this first-ever Chapter 9 bankruptcy case questioning state pension obligations will be appealed to decide whether the 10th Amendment giving rights to states is more powerful than federal bankruptcy code. Even Klein, who was inclined at first to approve bankruptcy without a trial, said he was going forward with the hearing to create an appellate record.

"You might have the court not approve the plan because the bondholders keep raising objections until CalPERS is impaired in some way. That will be cutting edge. That's where this case will get interesting," said bankruptcy attorney Michael Sweet.

1 killed, 3 hurt accident at Ark. nuclear plant

Story originally appeared on the Miami Herald.

One worker died and three others were injured Sunday morning when a heavy piece of equipment fell on them at an Arkansas nuclear plant, officials said.

The workers were moving the equipment from the turbine building at an Entergy Arkansas plant in Russellville, about 70 miles northwest of Little Rock. The three injured workers were taken to a hospital. The company stressed that there is no danger to the public.

The Arkansas Nuclear One plant provides about 30 percent of the state's energy demand, according to Entergy.

"We are deeply saddened by what has happened today," said Jeff Forbes, Entergy's chief nuclear officer. "Our greatest sympathy is with the family and friends of the employee who lost his life, and with those who sustained injuries."

Entergy's two nuclear reactors were shut down after the accident.

The plant was placed under an "unusual event classification," which is the lowest of four emergency classifications designated by the Nuclear Regulatory Commission.

Entergy provides electricity to 2.8 million customers in Arkansas, Louisiana, Mississippi and Texas.

Wyo. named most tax-friendly state; N.Y. worst

Story originally appeared on USA Today.

According to Census data released this week, state and local tax revenue rose in the U.S, for the 13th quarter in a row. With April 15 less than three weeks away, America's business owners will complete their personal taxes along with the rest of the country. According to the Tax Foundation, a think tank that advocates for lower taxes and a simpler tax code, some states remain much more tax friendly to businesses than others.

The Tax Foundation's 2013 State Business Tax Climate Index grades all 50 states on 118 different measures to reflect the favorability of their tax structure to businesses. The states that, according to the foundation, have the best business climates generally have lower tax rates, including lower personal and corporate income taxes, and less complicated tax codes. Wyoming has the best business tax climate in the country and New York the worst. Based on the Tax Foundation's report, these are the most and least tax-friendly states for business.

According to the report, low corporate tax rates are not the only issue that companies consider. Property taxes, for example, are also a major expense for businesses. Low income taxes are attractive to businesses because it is easier to attract employees to such states.

Simple tax structures are also important to companies. According to Scott Drenkard, economist at the Tax Foundation, one of the best ways states achieve this is by eliminating certain taxes altogether. Indeed, all but one of the states with the best tax climates for business do not levy a personal income tax, corporate tax or sales tax.

One exception is Utah. The state, which has the 10th most favorable business tax climate, levies every kind of tax measured by the report. However, it has flat rates for many of these, which the Tax Foundation considers more manageable. "Even though it has all the major taxes, it structures them in such a way that it is simple and transparent, and people and businesses understand it."

High tax rates and the presence of certain kinds of taxes are not the only components that make a state favorable for business. Drenkard notes that Delaware, which has the 14th best tax climate for business, "tends to get a lot of businesses that choose to incorporate there, even though there's a relatively high tax rate." In particular, it is easy to start a business in Delaware, and the state has a business-friendly regulation.

Not all agree that the Tax Foundation's portrayal of the business tax climate is a fair reflection of how attractive a state is to businesses. In an interview with 24/7 Wall St., Carl Davis, senior policy analyst at the Institute on Taxation and Economic Policy, explained that the assumption that higher tax rates are bad for business is unfair.

"Taxes exist to fund important government services, and so when a tax rate goes up, that revenue is put to various good uses that businesses benefit hugely from," Davis said. This includes, things like roads and bridges, an efficient court system, and "well-educated, trained employees with the skills they need to work effectively for their business."

In fact, some of the states with favorable climates, including Florida and Nevada, have lower taxes and, as a result, offer residents fewer government benefits. Others, like Wyoming, Montana and Alaska, have favorable tax climates for business, because they can afford to do so. These states are able to successfully raise cash through taxes on their thriving oil and gas industries. Consequently, despite the absence of many taxes, government benefits are often generous.

States with favorable business tax climates often have low unemployment. All but one of the 10 states with the best tax climates for business had a lower jobless rate in January than the national rate. On the other hand, four of the five states with the worst climates had high unemployment.

However, it would seem that the reason why the states with best tax climates for business have vibrant economies has less to do with their tax structure and more to do with abundant natural resources. In fact, five of the 10 states with the best taxes for business have among the biggest oil and natural gas reserves in the country.

Based on the Tax Foundation's 2013 State Business Tax Climate Index, 24/7 Wall St. reviewed the 10 states with the best and worst business tax environments. The tax rates and other data the Tax Foundation used to generate the rankings have changed slightly in a small number of cases. At the foundation's direction, 24/7 Wall St. reflected newer numbers when available. Unemployment rates are from the Bureau of Labor Statistics for January 2013. State debt and revenue figures are from the Tax Foundation for fiscal 2011, the most recent available year. Income, poverty, employment composition and state expenditure data are from the U.S. Census bureau, also from 2011.


10. Maryland

  • Taxes collected per capita: $2,756 (15th highest)
  • Unemployment: 6.7% (tied -- 20th lowest)
  • Corporate taxes collected per capita: $134 (19th highest)
  • Sales tax rate: 6.0% (tied --16th highest)

Despite having the 10th-best business tax climate in the country, Maryland actually has a relatively high corporate tax rate. However, its rank for individual tax rates was the sixth-lowest of all states. Maryland's weak business climate may be driving some companies away, according the Tax Foundation. Northrop Grumman chose Virginia instead of Maryland due to the state's comparably attractive tax climate.

9. Iowa

  • Taxes collected per capita: $2,368 (24th highest)
  • Unemployment: 5.0% (6th lowest)
  • Corporate taxes collected per capita: $82 (15th lowest)
  • Sales tax rate: 6.0% (tied --16th highest)

Iowa was rated by the Tax Foundation as having the second least favorable corporate taxes in the country, as it has a corporate income tax rate of 12% -- the highest in the nation. Despite these heavy taxes, Iowa collected just $82 per capita in taxes from corporations in 2011, vs. an average of $129 per capita in all states. Iowa benefited from one of the nation's lowest unemployment rates, which means more people earn a regular paycheck and have more money to spend -- potentially driving up tax revenue.

8. Wisconsin

  • Taxes collected per capita: $2,692 (17th highest)
  • Unemployment: 7.0% (tied -- 24th lowest)
  • Corporate taxes collected per capita: $149 (16th highest)
  • Sales tax rate: 5.0% (20th lowest)

Wisconsin's income tax policy was the fifth-worst of all states for business, according to the Tax Foundation. Wisconsin collected $149 in corporate income taxes per capita, in the top third of all states. In addition, the state brought in $1,128 in individual income taxes per capita, the 10th highest of all states. The Tax Foundation lists Wisconsin as a state where job growth has been hampered by taxes. The state's unemployment rate, however, was lower than the national rate in January.

7. North Carolina

  • Taxes collected per capita: $2,332 (24th lowest)
  • Unemployment: 9.5% (tied -- 4th highest)
  • Corporate taxes collected per capita: $114 (25th highest)
  • Sales tax rate: 4.75% (16th lowest)

North Carolina ranked as the fourth worst state in the nation for the impact of sales tax policies on businesses. On the other hand, the state has the nation's highest excise tax on gasoline sales, at 37.5 cents per gallon. This is especially negative for businesses, according to the Tax Foundation, because gasoline is a necessity for many businesses. Additionally, the state ranks among the worst for its individual income tax policies.

6. Minnesota

  • Taxes collected per capita: $3,557 (6th highest)
  • Unemployment: 5.6% (tied --11th lowest)
  • Corporate taxes collected per capita: $188 (9th highest)
  • Sales tax rate: 6.875% (7th highest)

Minnesota ranked seventh worst in both corporate taxes and individual income taxes. Minnesota collected $3,557 in per capita tax revenue, more than all but five states. The state collected $1,404 per capita from individual income taxes alone, more than all but four states. Minnesota is one of a handful of states across the country where lawmakers are weighing a shift toward higher sales taxes and away from personal income taxes. Yet state sales taxes are already higher than most states -- the 6.875% state sales tax rate is the seventh-highest in the nation.

5. Rhode Island

  • Taxes collected per capita: $2,603 (18th highest)
  • Unemployment: 9.8% (tied -- the highest)
  • Corporate taxes collected per capita: $141 (18th highest)
  • Sales tax rate: 7.0% (tied -- 2nd highest)

Rhode Island is the worst state in the nation for unemployment insurance taxes, which are paid by employers to support the states' unemployment insurance programs. This remains especially problematic for business owners because of the state's high unemployment rate, which was 9.8% in January and tied with California for the highest in the nation. The state also received a low grade for its property tax policy from the Tax Foundation, which noted that Rhode Island had one of the highest effective property tax rates in the U.S., at 4.9% of income. In his January budget release, Rhode Island Gov. Lincoln Chafee proposed lowering the corporate income tax rate in his state from 9% to 7%.

4. Vermont

  • Taxes collected per capita: $4,293 (4th highest)
  • Unemployment: 4.7% (4th lowest)
  • Corporate taxes collected per capita: $168 (11th highest)
  • Sales tax rate: 6.0% (tied --16th highest)

Vermont ranked as one of the worst states for corporate, individual income and property taxes. The state's individual income taxes rated poorly because the tax rate paid by its highest income bracket is especially high at 8.95%. This is important to many business owners running sole proprietorships and partnerships who pay taxes through individual income returns, according to the Tax Foundation. Vermont also had one of the highest property tax rates in the nation, at 5.27% of personal income. The state recently voted to raise millions of dollars through new taxes and is expected to increase taxes on gasoline to 33.6 cents per gallon, while raising income taxes for high earners.

3. California

  • Taxes collected per capita: $3,111 (11th highest)
  • Unemployment: 9.8% (tied-the highest)
  • Corporate taxes collected per capita: $256 (5th highest)
  • Sales tax rate: 7.5% (the highest)

California ranked lower than all other states except for New York in terms of individual income tax policy. In addition, the state ranked sixth from the bottom in terms of its corporate tax policy. In November, voters approved a state sales tax hike as well as higher taxes on the state's wealthiest residents in order to prevent massive spending cuts for the state's public schools and universities. Despite having higher tax rates than most of the country, California doesn't have a problem keeping large employers in the state. Twelve of the Fortune 100 companies in the U.S. are located in California, many of them technology giants such as Apple, Google and Hewlett-Packard.

2. New Jersey

  • Taxes collected per capita: $3,085 (12th highest)
  • Unemployment: 9.5% (tied-4th highest)
  • Corporate taxes collected per capita: $252 (6th highest)
  • Sales tax rate: 7.0% (tied-2nd highest)

New Jersey scored near the bottom of all states in several different types of taxes. The state ranked second from the bottom in property taxes, third from the bottom in individual income taxes and fifth from the bottom in sales taxes. New Jersey Gov. Chris Christie proposed a 10% deduction to income taxes across-the-board in 2012, which would have been phased in over a three year period. However, the measure was defeated by Democratic opponents in the legislature. It used to be worse for New Jersey. The state was ranked in last place in 2012 and would have taken the bottom spot once again if legislation raising taxes on millionaires had not been defeated.

1. New York

  • Taxes collected per capita: $3,497 (8th highest)
  • Unemployment: 8.4% (tied --12th highest)
  • Corporate taxes collected per capita: $207 (8th highest)
  • Sales tax rate: 4.0% (13th lowest)

The Tax Foundation considers New York to have the worst business climate of all states. While the state actually ranked in the better half in terms of corporate taxes, its individual income tax policy was ranked the worst in the country. The state collected $1,864 in personal income taxes per capita in 2011, higher than all other states. In addition, the Tax Foundation considered the state's unemployment taxes and property tax policies among the most burdensome of all states. Nevertheless, 17 of the 2012 Fortune 100 companies are located in New York, with nine of these companies among the Fortune 50. Drenkard said that despite the tax burden, many companies, especially large ones, are attracted to New York due to such factors as its large population and proximity to Wall Street.


10. Utah

  • Taxes collected per capita: $1,958 (13th lowest)
  • Unemployment: 5.4% (tied-9th lowest)
  • Corporate taxes collected per capita: $89 (19th lowest)
  • Sales tax rate: 5.95% (24th lowest)

Unlike most of the states with high marks for their business climate, Utah levies taxes in all five areas measured by the Tax Foundation. However, Drenkard pointed out that Utah received good marks for business because its taxes were not especially high in any one particular area. The state ranked third best in terms of property taxes and fifth best in terms of corporate tax policy. The low taxes, along with a better-than-average educated workforce, has encouraged companies to continue to build a presence in the state. For instance, Goldman Sachs has been building up its operation in Salt Lake City within the past year, and it is becoming one of the company's largest operations worldwide. Procter & Gamble has also built a presence in the state due to low taxes.

9. Texas

  • Taxes collected per capita: $1,696 (6th lowest)
  • Unemployment: 6.3% (tied-16th lowest)
  • Corporate taxes collected per capita: 0 (the lowest)
  • Sales tax rate: 6.25% (13th highest)

Texas is one of just seven states that have no individual income tax, all of which are among the most-friendly toward business. Outside of the individual income tax, however, Texas was rated poorly for many of its tax policies, including corporate taxes where it was rated 13th-worst. One reason for this low rank is that Texas taxes business es with a gross receipts tax -- in which company sales, rather than profits, are taxed. As of January, Texas was one of just five states to broadly tax all businesses using such a measure.

8. Montana

  • Taxes collected per capita: $2,316 (23rd lowest)
  • Unemployment: 5.7% (13th lowest)
  • Corporate taxes collected per capita: $125 (21st highest)
  • Sales tax rate: none (the lowest)

Montana is one of just five states that don't have a sales tax at either the state or the local level. In addition, the state has some of the lowest property taxes in the entire country. The state's effective property tax rate -- 0.72% of median home value in 2011 -- was lower than the 1.12% average rate across the country. Furthermore, while far from receiving the best ranks, the state's individual income and corporate taxes are more favorable than half of all states. Unlike some states, Montana has a flat corporate income tax, with all businesses paying 6.75% of all profits. Despite a pro-business tax climate, there are no Fortune 500 companies based in Montana.

7. New Hampshire

  • Taxes collected per capita: $1,761 (8th lowest)
  • Unemployment: 5.8% (14th lowest)
  • Corporate taxes collected per capita: $443 (2nd highest)
  • Sales tax rate: none (the lowest)

New Hampshire is one of just two states, along with Tennessee, that restrict personal income taxes to just interest and dividends. Additionally, New Hampshire is one of just five states that have no state-level sales tax. Partly because of this, New Hampshire ranked ninth for individual income policy and first for sales tax policy on the Tax Foundation's business climate index. However, the state had the nation's highest property tax rate as a percent of income as of July 2012, at 5.68% of residents' income, and it earned one of the worst scores in the U.S. for its property tax policy.

6. Washington

  • Taxes collected per capita: $2,566 (19th highest)
  • Unemployment: 7.5% (20th highest)
  • Corporate taxes collected per capita: 0 (the lowest)
  • Sales tax rate: 6.5% (10th highest)

Washington ranked high on the list largely because it doesn't have any individual income tax. The state's other tax policies generally received mediocre ratings, with its sales tax policy rated the third worst in the nation by the Tax Foundation. As of January, the state's sales tax rate was 6.5%, 10th highest in the nation. And when including the average local sales tax paid, the state has the fourth-highest sales tax, at 8.86%. Other policies, such as high excise taxes on different products, also lowered its rank. The state had the fifth-highest excise tax on cigarettes in January at $3.03 a pack. Because of these policies, Washington was named by the Institute on Taxation and Economic Policy as having the most regressive state tax structure in the nation -- meaning the poor pay far more of their income than the wealthy.

5. Florida

  • Taxes collected per capita: $1,718 (7th lowest)
  • Unemployment: 7.8% (18th highest)
  • Corporate taxes collected per capita: $99 (21st lowest)
  • Sales tax rate: 6.0% (16th highest)

Florida has no individual income tax. In addition, the state has a 5.5% flat corporate tax rate, lower than most states that levy one. Since Gov. Rick Scott took office in January 2011, he has worked to eliminate the corporate tax rate altogether. Although unsuccessful, he has managed to allow corporations to deduct up to $50,000 in profits from taxes, meaning that half of the state's corporations pay no tax at all. The state collected just $1,718 in taxes per capita in 2011, lower than all but seven other states. More than a quarter of the state's total revenue haul came from state sales taxes. The state brought in $1,021 in sales tax revenue per capita in 2011, higher than all but five states.

4. Alaska

  • Taxes collected per capita: $7,708 (the highest)
  • Unemployment: 6.7% (tied -- 20th lowest)
  • Corporate taxes collected per capita: $1,003 (the highest)
  • Sales tax rate: none (the lowest)

Alaska is one of only seven states in the U.S. that does not collect income taxes. Despite this, Alaska collected $17,630 in total revenue per capita, by far higher than any other state in the country. Most of Alaska's revenue is from taxes on oil and gas. The economy in Alaska has been performing considerably better than most states. The state's unemployment rate of 6.7% in January 2013 was considerably lower than the 7.9% across the country.

3. Nevada

  • Taxes collected per capita: $2,333 (25th lowest)
  • Unemployment: 9.7% (3rd highest)
  • Corporate taxes collected per capita: none (the lowest)
  • Sales tax rate: 6.85% (8th highest)

Nevada doesn't collect any individual or corporate income taxes. To make up for this, the state has a sales tax rate of 6.85%, the eighth-highest of all states. In addition, a sizable chunk of the state's revenue comes from taxes on gambling revenue. Tax revenue in January 2013 was down by more than 11% compared with the same month in 2012. A ballot initiative raising the state's gaming tax from 6.75% to 9% was devised in 2012. However, the measure never made it to the voters because a judge found the tax inadequately explained what it would accomplish.

2. South Dakota

  • Taxes collected per capita: $1,682 (3rd lowest)
  • Unemployment: 4.4% (3rd lowest)
  • Corporate taxes collected per capita: $19 (5th lowest)
  • •> Sales tax rate: 4.0% (tied-13th lowest)

South Dakota is one of the seven states without an individual income tax. In addition, the state only collected $19 per capita of corporate income tax in 2011, lower than all other states excluding the four states that do not collect corporate taxes. Because of these low taxes, the state only collected $1,682 per capita in 2011, lower than all but two other states. More than half of that money was collected in the form of sales taxes. In 2011, the state collected $985 in sales tax revenue per capita, the eighth-highest of all states. In January 2013, South Dakota had an unemployment rate of just 4.4%, lower than all states except for North Dakota and Nebraska.

1. Wyoming

  • Taxes collected per capita: $4,347 (3rd highest)
  • Unemployment: 4.9% (5th lowest)
  • Corporate taxes collected per capita: none (the lowest)
  • Sales tax rate: 4.0% (tied-13th lowest)

Wyoming is the highest-rated state in the nation for business tax policy. Like other states with strong business tax climates, it benefits from the absence of any individual income tax. Like Nevada and South Dakota, which ranked just behind Wyoming for the quality of their business tax climate, Wyoming has neither corporate income tax nor gross receipts tax. But while other states that did not tax income choose instead to tax sales heavily, Wyoming does not. As of January, its state sales tax rate was just 4%, one of the lowest of any state with such a tax. Including the average local sales tax, consumers paid an effective sales tax rate of just 5.3% on purchases, among the lowest in the nation.