Morning Business Memo:
A price break for online shoppers may be ending soon, with growing support for sales taxes on purchases made on the internet. This means many online shoppers would pay at least 5 percent more than they do today. Republicans in Congress have joined Democrats to support a bill that would give states authority to force Amazon, eBay, and other online companies to collect sales taxes. Now, says The Wall Street Journal, Republican governors “eager for new revenue to ease budget strains, are dropping their longtime opposition to imposing sales taxes on online purchases.” The Journal calls it “a significant political shift” that could lead to a change in federal law. Brick-and-mortar retailers have long argued that they face an unfair price disadvantage. But the change amounts to a tax hike for many consumers.
For more than two years Apple has dominated the market for tablet computers. Now it’s feeling the heat from competitors and may be getting ready to introduce a smaller, cheaper version of the iPad. Last week, Google began shipping the Nexus 7, and Microsoft recently announced it would create a new tablet. Both are likely to compete with Amazon’s Kindle for the less-expensive part of the tablet market. But Apple isn’t standing still. The New York Times reports: “The company is developing a new tablet with a 7.85-inch screen that is likely to sell for significantly less than the latest $499 iPad, with its 9.7-inch display, according to several people with knowledge of the project.”
We’ll learn more this week about the state of corporate America with a flurry of earnings reports. Microsoft, Intel, General Electric, Coca Cola, and Bank of America are among the big names to announce their second-quarter profits. Slower growth for earnings is likely. Since April Thompson Reuters data has downgraded its estimate of profits growth. Until now, big companies have been a real bright spot for the US economy since the end of the recession.
Expect more revelations in the coming months from the LIBOR rate fixing scandal. A number of global banks may have been involved. A published report says the Justice Department is building a criminal case. Prosecutors in New York, Connecticut are among the state and local authorities now investigating whether they lost money because of LIBOR rate manipulation
Richard Davies Business Correspondent ABC NEWS Radio twitter.com/daviesabc