TaxTalent recently released its most important tax staffing report of the year. The  2017 Global Tax Market Assessment identifies a potential perfect storm that could cause significant disruption for the tax industry in 2017.

Data indicates another thirty-year transformation cycle could result from major tax reforms.

The 2017 Global Tax Market Assessment is produced in conjunction with TaxSearch, Inc. and British-based BPA and forecasts global tax market trends and their effect on staffing, retention, and talent development within corporate tax departments.

According to Tony Santiago, president of US-based TaxTalent and TaxSearch: "This is a critical time for corporate tax functions to pay attention to what could be a major market shift. We believe there are three major trends that, if combined, could have a big impact on the tax industry in the near future."

The three potentially disruptive market trends include:

1. Major tax reform in the US.
2. International tax regulatory changes.
3. Major demographic shifts in the tax profession.

Santiago stresses that tax and finance leaders need to be prepared by looking at past data as evidence of another thirty-year disruption cycle. "It appears we could be entering another major market transformation like those experienced in 1986 and 1954. Corporate tax professionals need to be aware of these potential market changes so they can prepare their tax departments and be equipped to respond to any fallout from this situation."

Key Results from the 2017 Global Tax Market Assessment:

• 2017 will be a candidate-driven market in the US and globally, even more so than in 2016.
• The type of candidates needed in tax departments - having employees who are adaptable and flexible to change - will help tax departments significantly. These are key traits to look for while hiring as well as identifying existing employees in the US and globally.

(Source: TaxTalent)

Uber has recently received a permit from the California Department of Motor Vehicles to test its robot cars in the state and Consumer Watchdog warned that the cars should not carry passengers while still being tested.

"When Uber illegally deployed its robot cars in San Francisco last year, the vehicles were observed driving through red lights," said John M. Simpson Consumer Watchdog's Privacy Project Director. "Uber's technology simply isn't safe enough to put passengers at risk."

Under California law companies testing self-driving cars with a permit in the state must file reports of any crashes and annual "disengagement reports" describing when the robot technology failed and a human operator had to intervene.  Both reports are posted on the DMV's website.

"Now that Uber has permits to test, the company's activities must be closely monitored by police," Simpson said. "What is clear is that Uber must not use passengers as human guinea pigs as part of a publicity stunt."

Consumer Watchdog asked people in San Francisco to watch out for traffic violations and safety threats by Uber's test vehicles. "If you see something, say something," Simpson said.  Send reports to: UberSF@consumerwatchdog.org.

(Source: Consumer Watchdog)

Data through January 2017, released by S&P Dow Jones Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, shows the composite rate up three basis points from the previous month at 0.92% in January. The bank card default rate recorded a 3.21% default rate, up 26 basis points from December. Auto loan defaults came in at 1.06%, up three basis points from the previous month. The first mortgage default rate was 0.72%, up one basis point from December.

All five major cities saw their default rates increase in the month of January. Miami had the largest increase, reporting 1.67%, up 14 basis points from December. Miami's composite default rate is at a 31-month high. Dallas and Los Angeles both reported eight basis point increases from the previous month at 0.75% and 0.80%, respectively, in January. Chicago saw its default rate increase five basis points to 1.03%. New York reported a default rate increase of one basis point from the last month at 0.88%.

When comparing the bank card default rates among the four census divisions, the default rate in the south is considerably higher than the other three census divisions.

"While consumer credit default rates on mortgages and auto loans remain low and stable, default rates on bank cards have popped up to the highest level seen since July 2013," says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. "Recent data point to consumer optimism: retail sales rose 5.5% in January 2017 compared to a year earlier, consumer sentiment measures rose over the last two years, and employment and labor market conditions are favorable. Federal Reserve data on consumer credit and mortgage debt outstanding reveal that consumers are borrowing money.

"Current default levels do not present any immediate concerns for the economy. During 2004-2006, a period of strong retail sales and consumer spending, bank card defaults were higher than today. Moreover, even if interest rates were to increase much faster than the Fed or most analysts currently expect, the cost of borrowing money is unlikely to create problems for consumers. The weak spot, if there is one, would come with a rise in unemployment and an economic downturn."

The table below summarizes the January 2017 results for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision.

The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs:

(Source: S&P/Experian Consumer Credit Default Indices)

US mortgage rates jumped last week, with the benchmark 30-year fixed mortgage rate moving to 4.35%, according to Bankrate.com's weekly national survey. The 30-year fixed mortgage has an average of 0.25 discount and origination points.

The larger jumbo 30-year fixed climbed to 4.34%, while the average 15-year fixed mortgage rate rebounded to 3.51%. Adjustable mortgage rates also moved upward, with the 5-year ARM notching higher to 3.51% and the 7-year ARM stepping up to 3.73%.

Mortgage rates moved higher following increases in two different inflation measures – the Producer Price Index and the Consumer Price Index – and Fed Chair Janet Yellen's testimony to Congress that waiting too long to raise interest rates "would be unwise." With this week's move, the benchmark 30-year fixed mortgage rate reset a new high water mark since May 2014. The two inflation readings and strong results on retail sales for both December and January indicate an economy gaining momentum. Coupled with near full employment and the prospect of government stimulus, Janet Yellen reiterated the need to raise interest rates further. The timing however, remains uncertain. But within a 24-hour span following Yellen's initial comments to the Senate Banking Committee and the release of the retail sales and consumer price data, the odds of a March rate hike doubled from 13% to 26% according to trading in Fed funds futures.

At the current average 30-year fixed mortgage rate of 4.35%, the monthly payment for a $200,000 loan is $995.62.

SURVEY RESULTS
30-year fixed: 4.35% -- up from 4.27% last week (avg. points: 0.25)
15-year fixed: 3.51% -- up from 3.49% last week (avg. points: 0.22)
5/1 ARM: 3.51% -- up from 3.46% last week (avg. points: 0.26)

(Source: Bankrate.com)

Commercial real estate industry executives are optimistic about Q1 market conditions while taking a "wait and see" approach to new Administration policies and potential tax reform, according to The Real Estate Roundtable's Q1 2017 Economic Sentiment Index released this week.

"The Trump Administration and a new Congress are aiming to unshackle the economy by focusing on growth-oriented policies," said Roundtable CEO and President Jeffrey D. DeBoer. "As our Q1 Sentiment Index shows, leaders in commercial real estate are cautiously optimistic about what policy changes may bring, yet concerned about any potential unintended consequences that could threaten real estate's vast contributions to the US economy."

The Roundtable's Q1 2017 Sentiment Index registered at 55 — seven points up from the last quarter. [The Overall Index is scored on a scale of 1 to 100 by averaging Current and Future Indices; any score over 50 is viewed as positive.] This quarter's Current-Conditions Index of 55 increased four points from the previous quarter, and rose 1 point compared to the Q1 2016 score of 54. However, this quarter's Future-Conditions Index of 55 rose nine points from the previous quarter and is up 10 points compared to the same time one year ago, when it registered at 45.

The report's Topline Findings include:

• The Q1 Sentiment Index came in at 55, a seven point uptick from pre-election Q4. Reacting to the new administration in Washington, many are optimistic about potential market opportunities and the US economy. Mitigating this optimism is concern around potential tax policy reforms.
• While optimism has been the most common reaction to the new Administration, many responders are employing a 'wait and see' approach. Most expect changes in the real estate industry as a result of the policies of the new Administration.
• Despite previous concerns about asset values nearing peak pricing, many feel that pricing has stabilized. Industrial properties are perceived as well priced while many are reporting a lessening of values for multifamily properties in gateway cities.
• Foreign capital continues to seek real estate investment opportunities in the US market. As a result, access to equity capital is plentiful. Construction lending remains challenging to secure, but for high quality, stabilized assets, financing is available with competitive terms. Asset pricing and debt constraints are concerning, general sentiment about the US market is neutral to positive. Gateway markets have been identified as past peak pricing but many secondary and tertiary markets are intriguing for value-add investors.

Although 36% of survey participants said asset prices increased "somewhat higher" compared to one year ago, 43% of respondents said they expect generally flat valuations a year from now — reflecting the view that many believe pricing has stabilized for certain property types. Some also noted that inflows of private capital currently favor equity to debt, dependent on the quality of the property.

DeBoer added: "The Real Estate Roundtable and its members want to advance policies that will spur job creation and economic growth, always guided first by research, data and reasoned analysis that inform policymakers' understanding of all issues, particularly when making choices that affect real estate. We hope our information will assist the policy discussion as lawmakers continue to charge forward on proposals that could have an enormous impact on our nation's growth, prosperity and national security."

Data for the Q1 survey was gathered in January by Chicago-based FPL Associates on The Roundtable's behalf.

(Source: The Real Estate Roundtable)

It's not just citizens of seven Muslim-majority countries who are facing a US-enforced travel ban.

Under new rules, American citizens too could soon be banned from travelling by having their passports revoked for unpaid taxes, warns the boss of one of the world's largest independent financial advisory organizations.

Nigel Green, founder and CEO of deVere Group, is speaking out as the America's Internal Revenue Service (IRS) publishes details on its website of new powers to revoke US passports for taxes that remain unpaid.

He comments: "As President Trump hits out at the judge who has blocked his travel ban for citizens of seven Muslim majority countries, there are more travel complications from US authorities being introduced – ones that could prevent US citizens from travelling internationally.

"The IRS is to have a new tool to collect taxes.  The new law will use the threat of stopping people being able to travel by revoking passports if there are unpaid taxes.  It was passed by Congress in 2015 and details are now on the IRS website."

Mr Green continues: "If you have seriously delinquent tax debt, the IRS can certify that to the State Department. The Department generally will not issue or renew a passport to you after receiving certification from the IRS. The IRS website confirms that certifications will begin in early 2017."

He goes on to say: "This latest move would likely affect Americans living abroad most acutely for two reasons.

"First, because they would typically use their passports more often – not only for travel but for administrative matters, such as rental contracts, in their countries of residence.

"And second, since the worldwide rollout of the highly controversial Foreign Account Tax Compliance Act, or FATCA, in 2014, tax returns have become more complex, onerous and burdensome for US expats due to additional reporting requirements.

"Indeed, in our experience of working with US citizens who live abroad, 35 per cent are now likely to make a mistake on their tax return and/or file late due to the new complexities."

Mr Green concludes: "For US citizens who are resident overseas, the IRS' latest weapon to collect taxes, means it is more important than ever to stay on top of your taxes and file on time and correctly.

"With this in mind it's recommended that before submitting their tax returns they have them checked by an advisor with the relevant cross-border experience."

Mr Green concludes: "FATCA is a toxic law on many levels and there are renewed and strengthened efforts being made to have it repealed.  But until that happens, Americans overseas must adhere to the FATCA rules or face the heavy consequences."

Earlier this week, the deVere CEO launched the Washington-based Campaign to Repeal FATCA, and with co-leader, Jim Jatras, a leading authority on FATCA, is assembling a team of experienced DC professionals to push the repeal effort over the top.

(Source: deVere Group)

Following years of sluggish economic recovery, business leaders believe 2017 stands to usher in a long-awaited acceleration in growth. According to ‘America's economic engine - Breaking the cycle’, Deloitte's 2017 report on business and economic trends in the privately-held and middle-market segment, 83% of executives surveyed after the November election are confident that the US economy will improve over the next two years (compared to 65% last year). In fact, 39% of respondents expect the US economy to grow in excess of 3.5% over the next 12 months.

The executives surveyed are equally optimistic about their company's success and performance in the year ahead, particularly across key business metrics such as employment, productivity, profits and capital investment. 78% of respondents expect revenue growth in excess of 5%.

"Our postelection survey paints a positive picture for breakout growth in 2017, pointing to a strengthening economy and potential improvement in business conditions year-over-year," says Roger Nanney, vice chairman, Deloitte LLP, and national managing partner of Deloitte Growth Enterprise Services.

In addition, the survey revealed that two-thirds of respondents believe the US election results will boost the US economy; another 63% believe the new administration will have a positive impact on their company's operations.

Optimism tempered by heavy dose of uncertainty
While postelection promises have buoyed confidence in the economy and in company growth among private company and middle market executives, the results also show increased uncertainty: 70% feel more uncertain than they did a year ago about the main factors driving their future business prospects.

"Certain economic and geopolitical issues are among the obstacles these executives cite in the survey," says Bob Rosone, managing director, Deloitte Growth Enterprise Services, Deloitte LLP. "However, the respondents appear hopeful that these challenges might be addressed with policy changes by the new administration."

According to the survey, business leaders see increased regulatory compliance (33%), keeping up with the pace of technology (33%), and rising health care costs (32%) as the top three obstacles to their company's growth. Executives also emphasized skills shortages as a growing concern, increasing by 10 percentage points from last year as a roadblock to economic and business growth.

When asked which government measures would help their businesses grow the most over the next 12 months, the No. 1 response cited was reducing corporate tax rates; keeping interest rates low, rolling back health care costs, and supporting infrastructure needs were all tied for the next most important measure.

Technology and talent continue to drive mid-market investments
Technology yet again tops the list as the key investment priority for surveyed companies over the next 12 months. Business leaders are particularly looking to focus their technology investments on cloud computing (42%), data analytics (40%), and customer relationship management (34%). They indicated the greatest potential returns from technology investments like these may be business process improvement, employee productivity and customer engagement.

Employee development and training also continue to be a key investment, as 72% of survey respondents indicated they have difficulty finding new employees with the right skills and education. For this reason, training (47%), increasing full-time employees (44%), and increasing compensation (33%) were cited as the top investments in talent over the next 12 months.

Mid-market companies tap M&A and IPO to remain in growth mode
According to the survey, private and mid-market companies are also looking to mergers and acquisitions (M&A) and initial public offerings (IPOs) to reach their business goals. While global M&A and IPO activity slowed sharply in 2016, more companies from the survey expect to pursue deals and go public in 2017.

More than half (53%) of the companies surveyed say they will likely pursue M&A as an acquirer, up from 39% a year ago. Furthermore, 45% of companies say they will likely be an M&A target, up from just 21% last year. Two of the main factors that respondents believe will drive M&A activity in their company over the next 12 months are increased availability of capital and renewed confidence in the economy.

As for pursuing an IPO, 28% of companies reported that they would likely go public in the next 12 months, nearly doubling the number of companies from last year (15%). Reasons cited include broadening the exposure of the company's brand and products, the cost-effectiveness of equity capital, and the need for additional capital to fuel growth.

Companies look to global markets to help address challenges
The survey reiterated the importance of the global economy as US mid-market companies are increasingly looking overseas to expand their operations, boost their productivity, and develop new products and services.

More than half of the companies surveyed expect to increase their revenues generated outside of the US, with 29% predicting revenue increases between 26 and 40% over the next 12 months. Canada, Western Europe, and Asia Pacific are expected to be the top three contributing markets. Additionally, nearly 60% of mid-market companies expect to have 11% or more of their workforce outside the US, compared to 42% currently. This will be an important trend to follow as the skills gap consistently emerges as a growing concern.

"As mid-market companies plan for overseas expansion and closing the skills gap, new policies and regulations around trade could have a significant impact on economic activities abroad," concluded Nanney. "The good news is that companies in this segment are confident and looking for opportunities to improve their businesses in an ever-changing landscape.”

(Source: Deloitte)

The Fannie Mae Home Purchase Sentiment Index® (HPSI) increased by 2% in January to 82.7, ending a five-month decline. Four of the six components that comprise the HPSI were up in January.

The net share of Americans who believe that home prices will go up in the next 12 months rose by 7%, and the net share reporting significantly higher household income in the past 12 months rose by 5%. The net percentage of those who say that it is a good time to sell a house rose by 2%, while the net share of those who say it is a good time to buy a house fell by 3%. On net, consumers demonstrated slightly greater confidence about not losing their jobs, while the net share of those who believe mortgage rates will go down remained unchanged.

"Three months after the presidential election, measures of consumer optimism regarding personal financial prospects and the economy are at or near the highest levels we've seen in the nearly seven-year history of the National Housing Survey," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "However, any significant acceleration in housing activity will depend on whether consumers' favorable expectations are realized in the form of income gains sufficient to offset constrained housing affordability. If consumers' anticipation of further increases in home prices and mortgage rates materialize over the next 12 months, then we may see housing affordability tighten even more."

Home Purchase Sentiment Index – Component Highlights:

Fannie Mae's 2017 Home Purchase Sentiment Index (HPSI) increased in January by 2% to 82.7. The HPSI is up 1.2 percentage points compared with the same time last year.

• The net share of Americans who say it is a good time to buy a house fell by 3 percentage points to 29%, matching the survey low from May and September 2016.
• The net percentage of those who say it is a good time to sell rose by 2 percentage points to 15%.
• The net share of Americans who say that home prices will go up increased by 7 percentage points in January to 42%.
• The net share of those who say mortgage rates will go down over the next 12 months remained constant this month at -55%.
• The net share of Americans who say they are not concerned about losing their job rose 1 percentage point to 69%.
• The net share of Americans who say their household income is significantly higher than it was 12 months ago rose 5 percentage points to 15% in December, reversing the drop in December.

(Source: Fannie Mae)

A coalition of over 25 American businesses of diverse sizes and industries, including both importers and exporters, representing nearly every sector of the American economy have launched the American Made Coalition in support of pro-growth tax reform. The coalition strongly supports modernizing the outdated US Tax Code by removing barriers to economic growth and American job creation. The Coalition believes the obsolete and biased tax system subsidizing imports of foreign goods must be replaced with one that restores the United States' competitive advantage in the foreign marketplace.

"American workers and businesses are not competing today on a level playing field with foreign competitors because of an outdated and unfair tax system," said John Gentzel, coalition spokesman. "The American Made Coalition is committed to advancing legislation that modernizes our tax system, levels the playing field for American businesses and workers, encourages investment, incentivizes job creation in the US, and helps American-made products compete worldwide. The House tax reform blueprint has the best chance of moving real transformative tax reform for the first time in more than 30 years."

The American Made Coalition is focused primarily on supporting reform efforts, championed in the House of Representatives by Speaker Paul Ryan and Ways and Means Committee Chairman Kevin Brady, that would lower tax rates, encourage domestic investment, spur job creation, and modernize the overall tax system for a 21st Century economy.

A key aspect of the House tax reform blueprint is a border adjustment provision that would eliminate the "Made in America tax" - an unfair tax hitting goods produced domestically while favoring foreign-made goods. By ending the "Made in America tax," we can create a more favorable business environment for American manufacturing and level the playing field so American workers can compete with foreign competitors.

The Tax Foundation estimates the House Blueprint proposal will create 1.7 million new jobs, boost GDP by 9.1%, and increase wages by 7.7%.

The American Made Coalition believes that 2017 presents an important opportunity to modernize our tax system and a focused public campaign - one supporting competitive business tax rates, a modern territorial system, and the border adjustment of businesses taxes - is urgently required to achieve success. Together, these three components are essential to leveling the playing field for American-made goods and services and encouraging American jobs, investment, and manufacturing.

(Source: American Made Coalition)

Eventbrite, the world's leading ticketing and event technology platform which powers more than two million events each year, has acquired Ticketscript, one of Europe's largest self-service ticketing providers. The acquisition positions Eventbrite as Europe's third largest ticketing platform, and greatly expands the company's global prominence as a leading live music event technology partner, especially in clubs and live show venues.

In 2016 alone, Ticketscript and Eventbrite's combined European operations processed more than 35 million tickets worth over EUR500 million for nearly a million events.

Following the acquisition, around a quarter (23%) of Eventbrite's global employees will work in Europe.

Ticketscript, founded in 2006, is headquartered in Amsterdam and is active in five European countries: the UK, Germany, the Netherlands, Spain and Belgium.

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Frans Jonker, CEO of Ticketscript, who will join Eventbrite as GM for continental Europe, said: "We have been building significant market presence in Europe for ten years, with a focus on self-service ticketing for music events. We share Eventbrite's passion for allowing event organisers to control their event marketing and ticketing, whilst retaining their end customer data. Joining forces with Eventbrite, the global innovation leader in event technology, will no doubt help further accelerate the digital transformation of the European live experience industry."

Eventbrite processed 150 million tickets for more than 600,000 event organisers in 180 countries last year. Founded in San Francisco in 2006, Eventbrite opened its first international presence in London in 2011, and maintains offices in eight countries on four continents. The company's other European operations are in Ireland, Germany, and most recently the Netherlands.

Julia Hartz, CEO of Eventbrite, said: "This acquisition supercharges Eventbrite's footprint in Europe and brings ten additional years of traction in the music space and experience in European markets to our business. It perfectly aligns with our strategic vision to become the world's leading marketplace for live experiences, and adds significant assets and technical power to our platform. We are looking forward to this new partnership combining the best solutions from both companies, and bringing them to our customers around the world."

(Source: Eventbrite)

United Steelworkers (USW) International President Leo W. Gerard issued the following prepared statement at a press conference this week where the Economic Policy Institute (EPI) released a study outlining the jobs lost from the US-China trade deficit since 2001. The EPI study identifies job losses in every state and congressional district.

"EPI's study paints a stark picture of the damage that the growing US trade deficit with China has inflicted on workers. Since China joined the World Trade Organization (WTO) in 2001, more than 3.4 million jobs have been lost across the country. No state or congressional district has been immune from the negative impact of China's trade policies.

"China has used virtually every tool, legal and illegal, to steal our jobs and undermine our manufacturing base and economy. Subsidies, dumping, overcapacity, currency manipulation and cyberespionage are all practices used by China to help amass a $3.9 trillion trade surplus since 2001. Mounting trade deficits are sapping our economic strength and undermining our national security. It's time to demand that China play by the rules.

"The USW is the largest industrial union in North America. Our members know firsthand the impact of China's policies. We have participated in or initiated dozens of trade cases at tremendous cost - money and jobs - to respond to China's actions. Our government needs to recognize how its flawed trade policies have damaged workers and their communities, while corporations and Wall Street have reaped profits. We need a new approach to trade that puts working families first.

"Trade played an enormous role in last year's campaigns. Promises have been made to address these problems, but time is growing short. Working Americans want change and expect their leaders to take action rather than continuing to cater to the special interests who offshore production and outsource jobs. Talk is cheap and threats are easy.

"What is needed is a clear, consistent and comprehensive approach to deal with China's protectionist and predatory trade practices. Politicians have talked about the need to change our nation's trade policies, but slogans and speeches are no substitute for action."

To see full report, click here. For more on the EPI, go to www.epi.org

(Source: EPI)

Countering the narrative that slow economic growth is "the new normal" for America's economy, the Pacific Research Institute today released the first in a series of reports from its new study, Beyond the New Normal, which makes the case that future U.S. economic growth can meet -or exceed - past growth trends if the right economic policies are adopted.

"America's economy has been stuck in neutral for so long that some economists claim that low growth rates are now the new normal," said Dr. Wayne Winegarden, PRI Senior Fellow in Business and Economics, and co-author of Beyond the New Normal.

"History has shown that when free-market policies are embraced, America's economic engine roars. President Trump and Congress should adopt these policies that have proven successful in growing the economy and lifting more people out of poverty."

Part 1 of Beyond the New Normal provides an overview of the case Winegarden and co-author Niles Chura will present arguing that free-market policies are needed to stimulate long-term, strong economic growth in the US.

Among the key points in Part 1 of their study:

• Average family income and average household income stagnated during much of the 1970s, and since 1999. Average annual real GDP growth has averaged just 1.89 percent since 2001.

• During times of slow economic growth, other negative trends, including slower average household income growth, greater income inequality, and increased poverty, have followed. These negative trends were reversed when the economy grew at a more rapid pace.

• Strong economic growth occurs when there is a pro-growth policy environment in place that:

1. Empowers the private sector to efficiently employ capital, labor, and technology;
2. Discourages value destroying rent-seeking behavior; and
3. Provides core public goods as efficiently as possible.

"Status quo thinking is holding back robust economic growth and keeping more Americans stuck in poverty," said PRI President Sally Pipes. "In this and subsequent volumes, Wayne and Niles make the compelling case that the President and Congress must instead embrace proven, free-market policies if we are to return America to the days of strong and sustained economic growth."

Dr. Wayne Winegarden is a Senior Fellow in Business and Economics at Pacific Research Institute. He is also the Principal of Capitol Economic Advisors and a Contributing Editor for EconoSTATS. Niles Chura is the founder of Ouray Capital.

(Source: Pacific Research Institute)