WASHINGTON (AP) — In the fiscal cliff wars, a pivotal battle is raging between Democrats demanding to raise revenue by boosting tax rates on the nation's highest earners and Republicans insisting on eliminating deductions and other tax breaks instead. Which is better for the economy? Analysts say it depends.
Economists generally agree that a simpler tax code with lower rates and fewer deductions, exemptions and credits would help the economy. With fewer tax preferences, people would be more likely to seek the best investments for their money instead of the most lucrative tax breaks. And lower rates would leave them more money to spend. Both would add oomph to the economy.
But ask whether the higher tax rates that President Barack Obama wants would hurt the economy more than curbing deductions, as Republicans assert, and the picture is less clear. While many economists say the economy theoretically would work more efficiently if the tax code provided fewer preferences, many said it would depend on which deductions lawmakers curb — a complicated exercise in a world where one person's wasteful loophole may be viewed by others as an economic lifeline.
For example, one of the biggest tax breaks is the widely popular deduction for interest on home mortgages below $1 million. Because of it, the government this year will take in $87 billion less than it would if the deduction didn't exist.
That deduction allows many to buy homes they otherwise couldn't afford and is strenuously defended by the housing industry. But critics say it does little to help lower-income people while it encourages others to go into debt for costlier homes than they need — an activity they say taxpayers should not subsidize.
APNewsBreak: Bangladesh factory lost fire safety clearance months before 112 killed in blaze
DHAKA, Bangladesh (AP) — A Bangladeshi garment factory that was producing clothes for Wal-Mart, Disney and other major Western companies had lost its fire safety certification in June, five months before a blaze in the facility killed 112 workers, a fire official told The Associated Press.
Separately, the owner of the Tazreen factory told AP that he had only received permission to build a three-story facility but had expanded it illegally to eight stories and was adding a ninth at the time of the blaze.
The revelations about the deadliest garment fire in Bangladeshi history provide insight into the chaotic nature of safety enforcement at the country's more than 4,000 garment factories. The powerful garment industry is responsible for 80 percent of the South Asian nation's exports.
A Dhaka fire official said the Tazreen factory's fire safety certification had expired on June 30, and fire officials refused to renew it because the building did not have the proper safety arrangements. The official, who spoke on condition of anonymity because he was not authorized to speak to the media, wouldn't provide details of the violations.
"I can't explain more because the case is very sensitive and this is under investigation," the official said.
AP-GfK Poll: Obama approval rises postelection, most expect 2nd term economic improvement
WASHINGTON (AP) — A month after the bitterly fought election, President Barack Obama has his highest approval ratings since the killing of Osama bin Laden, according to an Associated Press-GfK poll, and more Americans say the nation is heading in the right direction now than at any time since the start of his first term.
Obama's approval rating stands at 57 percent, the highest since May 2011, when U.S. Navy SEALs killed the terror leader, and up 5 percentage points from before the election. And 42 percent say the country is on the right track, up from 35 percent in January 2009.
A majority think it's likely that the president will be able to improve the economy in his second term.
"Compared to the alternative, I'm more optimistic about government and the economy with him in office," said Jack Reinholt, an independent from Bristol, R.I., who backed Obama in 2008 and again in 2012. "I feel he has the better path laid out."
Still, four years of partisan conflict in Washington have taken a toll on the president's image.
With regulators poised to propose black boxes in all new cars, privacy concerns go unaddressed
WASHINGTON (AP) — Many motorists don't know it, but it's likely that every time they get behind the wheel, there's a snitch along for the ride.
In the next few days, the National Highway Traffic Safety Administration is expected to propose long-delayed regulations requiring auto manufacturers to include event data recorders — better known as "black boxes" — in all new cars and light trucks. But the agency is behind the curve. Automakers have been quietly tucking the devices, which automatically record the actions of drivers and the responses of their vehicles in a continuous information loop, into most new cars for years.
When a car is involved in a crash or when its airbags deploy, inputs from the vehicle's sensors during the 5 to 10 seconds before impact are automatically preserved. That's usually enough to record things like how fast the car was traveling and whether the driver applied the brake, was steering erratically or had a seat belt on.
The idea is to gather information that can help investigators determine the cause of accidents and lead to safer vehicles. But privacy advocates say government regulators and automakers are spreading an intrusive technology without first putting in place policies to prevent misuse of the information collected.
Data collected by the recorders is increasingly showing up in lawsuits, criminal cases and high-profile accidents. Massachusetts Lt. Gov. Timothy Murray initially said that he wasn't speeding and that he was wearing his seat belt when he crashed a government-owned car last year. But the Ford Crown Victoria's data recorder told a different story: It showed the car was traveling more than 100 mph and Murray wasn't belted in.
Strong earthquake shakes northeastern Japan, causing small tsunami; no injuries reported
TOKYO (AP) — A strong earthquake struck Friday off the coast of northeastern Japan in the same region that was hit by a massive earthquake and tsunami last year. A city in the region reported that a small tsunami had hit, but there were no immediate reports of injuries or damage.
The Japan Meteorological Agency said the earthquake had a preliminary magnitude of 7.3 and struck in the Pacific Ocean off the coast of Miyagi prefecture at 5:18 p.m. (0818 GMT). The epicenter was 10 kilometers (6.2 miles) beneath the seabed.
After the quake, which caused buildings in Tokyo to sway for at least several minutes, authorities issued a warning that a tsunami potentially as high as 2 meters (2.19 yards) could hit. Ishinomaki, a city in Miyagi, reported that a tsunami of 1 meter (1 yard) hit at 6:02 p.m. (0902 GMT).
The Pacific Tsunami Warning Center said there was no risk of a widespread tsunami.
Miyagi prefectural police said there were no immediate reports of damage or injuries from the quake or tsunami, although traffic was being stopped in some places to check on roads.
Sandy, fiscal cliff fears likely slowed hiring in Nov., though job market may be strengthening
WASHINGTON (AP) — Superstorm Sandy is widely thought to have slowed U.S. job growth last month. The only question is how much — an answer that's expected to emerge Friday in the government's jobs report for November.
Yet once the storm's impact is cleared away, the report may reveal that the job market is strengthening.
Many economists predict employers added fewer than 100,000 jobs last month, and some think it was fewer than 50,000. That would be far below the 171,000 created in October and normally a sign of a weak market. The unemployment rate is expected to remain 7.9 percent.
Analysts caution, though, that Sandy likely reduced the November job gains significantly. And some employers might have delayed hiring because of concerns that the economy will fall off the "fiscal cliff" next year. That's the name for tax increases and spending cuts that will take effect in January if Congress and the White House fail to reach a budget deal by then.
If not for those factors, some analysts estimate the job gains in November might have been as high as 200,000. That would represent the best month of hiring since February.
Election hits record $2B mark amid last-minute donations in upended campaign finance system
WASHINGTON (AP) — Remarkable for its last-minute surge of contributions, the U.S. presidential election witnessed unprecedented sums of cash boosting two men in their quest for the White House. It was a cost that surpassed $2 billion and sometimes came with the cloak of anonymity for billionaire donors.
The election was the first in which "super" political action committees spent hundreds of millions on television ads, especially those supporting GOP presidential nominee Mitt Romney. Super PACs, like those helping President Barack Obama, benefited from deep wells of money from wealthy donors and corporations.
A handful of mega donors stood out. The most prominent were Las Vegas casino mogul Sheldon Adelson and his wife, Miriam, who together contributed nearly $100 million — as promised — to help Republican candidates. On the left, celebrities like Jeffrey Katzenberg poured millions of dollars into efforts helping Obama win a second term.
More than $230 million in super PAC money bolstered Romney's candidacy, adding to the massive haul by the Republican Party for the former Massachusetts governor. The pro-Romney super PACs were able to hammer the president in swing states with meticulously designed ads highlighting a woeful economy and what they portrayed as Obama's failed record.
A sizable chunk of that cash flowed in just weeks before Election Day. Because Federal Election Commission rules don't require groups to report until late November the money they've raised since mid-October, many top donors escaped scrutiny until after the Nov. 6 voting. The Adelsons' $33 million gift to two pro-Romney super PACs, as well as $3 million from Larry Ellison, head of software giant Oracle Corp., were not divulged until Thursday.
AP Exclusive: Satellite images reveal snow may have slowed NKorea's rocket launch preparations
SEOUL, South Korea (AP) — New satellite images indicate that snow may have slowed North Korea's rocket launch preparations, but that Pyongyang could still be ready for liftoff starting Monday.
South Korean media reports this week quoted unnamed officials in Seoul as saying North Korea had mounted all three stages of the Unha rocket on the launch pad by Wednesday. But snow may have prevented Pyongyang from finishing its work by then, according to GeoEye satellite images from Tuesday that were scrutinized by analysts for the websites 38 North and North Korea Tech and shared Friday with The Associated Press.
The analysis and images provide an unusually detailed public look at North Korea's cloaked preparations for a launch that the United Nations, Washington, Seoul and others say is a cover for a test of technology for a missile that could be used to target the United States.
The launch preparations have been magnified as an issue because of their timing: Both Japan and South Korea hold elections this month, and President Barack Obama will be inaugurated for his second term in office in January.
North Korea, for its part, says it has a right to pursue a peaceful space program and will launch a satellite into orbit sometime between Monday and Dec. 22. That launch window comes as North Korea marks the Dec. 17 death of leader Kim Jong Un's father, Kim Jong Il. North Korea is also celebrating the centennial of the birth of Kim Jong Un's grandfather, national founder Kim Il Sung.
George Zimmerman sues NBC and reporters, claiming defamation over edited 911 call
ORLANDO, Fla. (AP) — George Zimmerman sued NBC on Thursday, claiming he was defamed when the network edited his 911 call to police after the shooting of Trayvon Martin to make it sound like he was racist.
The former neighborhood watch volunteer filed the lawsuit seeking an undisclosed amount of money in Seminole County, outside Orlando. Also named in the complaint were three reporters covering the story for NBC or an NBC-owned television station.
The complaint said the airing of the edited call has inflicted emotional distress on Zimmerman, making him fear for his life and causing him to suffer nausea, insomnia and anxiety.
The lawsuit claims NBC edited his phone call to a dispatcher in February. In the call, Zimmerman describes following Martin in the gated community where he lived, just moments before he fatally shot the 17-year-old teen during a confrontation.
"NBC saw the death of Trayvon Martin not as a tragedy but as an opportunity to increase ratings, and so set about to create a myth that George Zimmerman was a racist and predatory villain," the lawsuit claims.
All good feeling lost as NHL, union break off labor talks on wild Thursday
NEW YORK (AP) — Donald Fehr thought he and the hockey players he leads were close to a deal to save the season. The NHL said not so fast, and then took away everything that created all the optimism in the first place.
When the 82nd day of the lockout was over, it was hard not to think the sides were thrown back to the very start of the fight. The problem is this is not the summer or even October. It's December, and there isn't much time left to reach the elusive deal and get back on the ice.
Most of Thursday, NHL negotiators waited for the players' association to wrap up internal discussions and get back to them regarding a proposal the league made Wednesday night. Owners greatly increased the amount of dollars they were willing to pay on the "make-whole" provision to compensate players in transitioning to the new collective bargaining agreement.
But that price came with a cost: Three conditions the NHL required the players to agree to if they wanted the influx of funds. The league wasn't looking to negotiate on those points on Thursday. It wanted a yes or no answer.
When management didn't get it, negotiators got up after only an hour together and left.