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Today’s issue includes an article Speculation: Obama on Enforcement, Taxes, Health by Jaclyn Jaeger (password required) reporting that corporate America needs to brace for more muscular and more cooperative regulatory enforcement efforts, new tax laws, and probably new regulations for how companies provide health insurance to the workforce, as the Obama Administration prepares to move into power next year.
Law firms, auditors, and consultants are furiously churning out legal memos and similar guidance, all speculating on how regulatory compliance may change once Jan. 20, 2009, rolls around. With only the first few Obama cabinet nominations dribbling out, nobody has any specifics yet, but already the contours of what to come are emerging. The article quotes Thomas Mueller, a partner at WilmerHale, that an Obama Justice Department—to be headed by Eric Holder, nominated just last week to be attorney general—will continue to make enforcement a high-priority item saying he expects to see a greater degree of cooperation between the Federal Trade Commission and the Justice Department, especially on issues like antitrust policy. “For the first time in quite a long time, antitrust policy actually surfaced as a campaign issue. . . There is today a greater tension on antitrust enforcement policies between existing actors,” he said. “There are tensions between the FTC and the DoJ; there are tensions between the United States and the rest of the world. That will force changes and force conflict that will need to get resolved.”
The article goes on to say that corporate America can also expect major changes in tax policy over the next several years. What those changes will be is anyone’s guess right now, but experts all agree that any short-term reform will be aimed at reviving the battered economy. Quoting Drew Lyon, a principal at PricewaterhouseCoopers, the article reports predicts no increase in the corporate tax rate (noting that the stated corporate tax burden in the United States is 39 percent) any time soon, since competitiveness in the marketplace will be a key concern for the next administration: “The U.S corporate tax rate is really at the very high end of the nations we compete against.” The article goes on to speculate that other reforms may come in the form of tax incentives for companies that tie in some way to maintaining and expanding domestic employment.
One other area of speculation is health care costs. Under Barack Obama’s plan to reform the system, employers would be required to provide insurance to employees or pay into a pool for the otherwise uninsured. How such a plan would be administered and enforced remains unclear right now.