McKonomics

Manufacturing Sales by Creating Uncontested Market Space

For our second McKonomics Podcast Scott Heintzelman, Partner and resident blogger, interviews John Lloyd, President & CEO of MANTEC, Inc. Listen in to find out why the manufacturing sector plays such a big part in our economy and get some tips on what best practices manufacturers can implement to improve performance. 

The McKonomics Podcast Series will continue in coming weeks with an in-depth look at the Construction industry. Stay tuned as we plan to interview other experts in the fields that impact our economy the most.  Enjoy the show, and check back for future episodes!

Click here for the Podcast or subscribe.

Click here to request for a written transcript of the interview.

American Recovery and Reinvestment Act: Businesses Feel the Changes in 10 Big Ways

The latest economic stimulus law, enacted on February 17, 2009, contains tax incentives designed to get the stagnant U.S. economy moving again. Here are 10 significant changes that might have an impact on your business.

Change #1: Some Businesses Can Carry Back 2008 Losses Up to Five Years 
 
Under the new law, eligible businesses can elect to carry back 2008 net operating losses (NOLs) for either three, four, or five years to claim refunds of federal income taxes paid for earlier years. This is a beneficial exception to the general NOL carryback rule, which allows businesses to carry back most losses only two years.

Ruling in R&D Tax Credit Case is Good News for Business!

On June 9, 2009, the 5th Circuit Court of Appeals vacated the Texas Southern District Court’s ruling in U.S. v. McFerrin. The McFerrins had co-founded KMCO, Inc., a corporation located in Texas that manufactures commodity and specialty chemicals. They engaged alliantgroup, the nation’s leading provider of specialty tax services, to determine whether KMCO’s expenditures for research and development (R&D) were eligible for the R&D Tax Credit. alliantgroup conducted the study and established that KMCO had conducted activities that qualified for an R&D Tax Credit.
 
The Government challenged the McFerrin’s credit, and after a six-day trial, the District Court ruled in favor of the Government on the grounds that the taxpayer had failed to meet the threshold of innovation required by the “discovery test,” had failed to demonstrate that the taxpayer had conducted a process of experimentation, and had failed to substantiate its research credit. 

Cash for Clunkers

Last week the Senate passed a bill called “Cash for Clunkers.”  If you have not yet heard of this bill and wonder “could it really mean the government giving cash to people to turn in their clunker car?”  You are correct.

The program is designed to offer $3,500 or $4,500 cash rebates to NEW car buyers who turn in older, less fuel-efficient models.  The idea being that this will jump-start the car market.  The proposed program is limited to $1 billion and expires in October or November.

Pennsylvania Considering Tax Hike?

Like most states, Pennsylvania is looking at a huge deficit as it prepares its budget for the new fiscal year.  Most estimates put this number around $3 billion.  That is not a small amount of money to make up and to date many proposed solutions are floating around.

The Senate Republicans have put forth a budget that includes no tax increases but does include a large decrease in spending.  The House Democrats have proposed a tax increase to make up the shortfall.  What appears to be a compromise that is gaining momentum and supported by Governor Ed Rendell is a temporary 10% increase to the personal income tax rate to 3.37% for three years.  There is precedent for this type of one-time increase, as we did a very similar increase in 1983 and 1991.

The Paradox of Thrift and The New Normal

In our first McKonomics Podcast, join Scott Heintzelman, Partner and resident blogger, as he interviews Scott Ehrig, Vice President & State Investment Manager at M&T Investment Group, for a look at how we got where we are in this economy.  Learn about the "Paradox of Thrift", and how changes in consumer savings patterns affect the economy by hundreds of billions of dollars, and explore what the "New Normal" will look like as we look for the upside in the coming months.  

This Podcast Series will continue with in-depth looks at industries like Manufacturing and Construction as we interview experts in the fields that affect our economy the most.  Enjoy the show, and tune in for future episodes!

Click here for the Podcast or subscribe.

Click here to request for a written transcript of the interview.