BUSINESS BRIEFS
1.6 million firms owe government $58 billion in taxes
Associated Press
WASHINGTON — More than 1.6 million businesses owe the federal government in excess of $58 billion in delinquent payroll taxes, interest and penalties, including money withheld from employees' salaries, a congressional report says.
The numbers haven't changed much in a decade despite Internal Revenue Service enforcement, the Government Accountability Office found. In 1998, about 1.8 million businesses owed about $49 billion.
Today, however, more debts are longstanding. Nearly 15,000 employers owe at least five years' worth of taxes, and nearly 500 owe for 10 years, the study says.
The lost payroll taxes are part of a much larger "tax gap" that each year costs the government more than $400 billion in unpaid taxes. An IRS report found that the tax gap was $345 billion in 2001 alone.
PAULSON REVEALS BOND BAILOUT
WASHINGTON — The Bush administration and federal banking regulators joined with the nation's four largest banks yesterday to endorse a new way to pump money into the battered U.S. mortgage market.
Treasury Secretary Henry Paulson unveiled a set of best practices designed to encourage banks to issue a debt instrument known as a covered bond.
The administration hopes these bonds will replace some of the mortgage financing that has disappeared as investors have incurred billions of dollars of losses on mortgage-backed securities.
MERRILL LYNCH TO RAISE CAPITAL
NEW YORK — Merrill Lynch & Co., in a broad move to clean up its troubled balance sheet, said yesterday it will sell a big slice of its asset-backed securities and issue new stock to raise $8.5 billion of fresh capital.
The world's largest brokerage, struggling to right itself as the credit crisis continues, said it will issue more than 200 million new common shares as part of the deal. Singapore sovereign wealth fund Temasek Holdings agreed to boost its stake by acquiring another $3.4 billion stake, while Merrill's management plans to buy 750,000 shares.
GM CUTS JOBS IN OHIO, LOUISIANA
NEW YORK — General Motors Corp. said yesterday it will cut shifts at plants in Ohio and Louisiana, eliminating 1,760 jobs, as part of the automaker's previously announced plan to reduce vehicle production due to weak demand for trucks and sport utility vehicles.
The cuts bring GM's truck and SUV production cuts to just under the 300,000 units company officials had hoped for this year, Sapienza said.
KRAFT POSTS RISE IN QUARTERLY PROFITS
MILWAUKEE — Kraft Foods Inc. reported growth in the second quarter yesterday, as consumers, undeterred by price increases, abandon restaurants for less costly meals at home and the company benefits from its restructuring plan.
The nation's largest food and beverage maker is also benefiting from price increases: It's raised its prices, on average, 7 percent in the most recent quarter.
Kraft reported a second-quarter profit increase of almost 4 percent in the April-June period yesterday, saying higher prices helped offset rising costs.
Profit rose to $732 million, or 48 cents per share in the quarter, up from $707 million, or 44 cents per share, a year earlier.
TOYOTA LOWERS SALES FORECAST
TOKYO — Toyota lowered its global vehicle sales plan for this year to 9.5 million vehicles — down from 9.85 million — as the sluggish North American market slows the Japanese automaker's momentum.
Even with the lower number announced yesterday, Toyota Motor Corp. plans to sell more vehicles than it did last year.
The pace of Toyota's growth has been slowing. Under the new target it would inch up 1 percent this year, in contrast to a 6 percent climb in 2007, when it sold 9.37 million vehicles
