Eight killed in Yemen clashes; attacks in capital target officers

SANAA (Reuters) - At least six militants and two soldiers were killed in Yemen on Tuesday in fighting near a damaged oil pipeline east of the capital Sanaa, a defense ministry official and residents said.
Separately, gunmen and bombers targeted three senior military officers and the transport minister in a series of attacks in the capital Sanaa.
In one incident, two gunmen riding a motorbike shot dead Brigadier Fadel Mohammed Ali, an adviser to the minister of defense, outside the ministry's offices in Sanaa, a police source said. Further details were not immediately available.
Gunmen fired at the home of Transport Minister Waed Batheeb, wounding two of his guards, a transport ministry official said. A colonel was seriously wounded in an attack by gunmen and another officer survived a thwarted bomb attack on his car.
The fighting in turbulent Maarib province broke out when government troops backed by air strikes tried to secure the pipeline and repair damage inflicted last month by local militants, the official said.
He added that the army controlled the area surrounding the pipeline after Tuesday's clashes.
Yemen's oil and gas pipelines have repeatedly been sabotaged by Islamist fighters or tribesmen since an uprising erupted last year, causing fuel shortages and slashing export earnings for the impoverished country.
Yemen's stability is a leading security goal for the United States and Gulf Arab allies because of its strategic position next to top oil exporter Saudi Arabia and shipping lanes, and because it is home to one of the most active wings of al Qaeda.
Under an agreement reached earlier this month between tribal chiefs and the government, tribes in Maarib were meant to stop militants from attacking the pipeline in return for a halt to air strikes in the area.
A local official said troops were deployed on Tuesday after tribesmen failed to secure the pipeline or to hand over fighters involved in the killings of 17 army officers and soldiers in an ambush earlier in December. They were killed while inspecting the pipeline.
The affiliation of the militants in Maarib is unclear. Local sources said some had links to al Qaeda, while others were involved in kidnapping foreigners to pressure the government to release jailed kinsmen.
OFFICER WOUNDED IN CAPITAL
Yemen-based Al Qaeda in the Arabian Peninsula has mounted operations in Saudi Arabia and attempted attacks against the United States, which has stepped up strikes by drones.
In the capital, the ministry of defense said one man was arrested on Tuesday for planting a bomb in the car of an officer at the Central Security Forces. The attempt to blow up the car was foiled, the ministry said. Colonel Sameer al-Gharbani, an officer in the Republican Guard, was critically wounded in an attack by unidentified gunmen, a source at the Guard said.
The string of attacks happened less than a week after President Abd-Rabbu Mansour Hadi overhauled the armed forces as part of a Gulf-brokered power-transfer plan that helped ease former President Ali Abdullah Saleh from power in February.

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Health care tax hikes for 2013 may be just a start

New taxes are coming Jan. 1 to help finance President Barack Obama's health care overhaul. Most people may not notice. But they will pay attention if Congress decides to start taxing employer-sponsored health insurance, one option in play if lawmakers can ever agree on a budget deal to reduce federal deficits.
The tax hikes already on the books, taking effect in 2013, fall mainly on people who make lots of money and on the health care industry. But about half of Americans benefit from the tax-free status of employer health insurance. Workers pay no income or payroll taxes on what their employer contributes for health insurance, and in most cases on their own share of premiums as well.
It's the single biggest tax break the government allows, outstripping the mortgage interest deduction, the deduction for charitable giving and other better-known benefits. If the value of job-based health insurance were taxed like regular income, it would raise nearly $150 billion in 2013, according to congressional estimates. By comparison, wiping away the mortgage interest deduction would bring in only about $90 billion.
"If you are looking to raise revenue to pay for tax reform, that is the biggest pot of money of all," said Martin Sullivan, chief economist with Tax Analysts, a nonpartisan publisher of tax information.
It's hard to see how lawmakers can avoid touching health insurance if they want to eliminate loopholes and curtail deductions so as to raise revenue and lower tax rates. Congress probably wouldn't do away with the health care tax break, but limit it in some form. Such limits could be keyed to the cost of a particular health insurance plan, the income level of taxpayers or a combination.
Many economists think some kind of limit would be a good thing because it would force consumers to watch costs, and that could help keep health care spending in check. Obama's health law took a tentative step toward limits by imposing a tax on high-value health insurance plans. But that doesn't start until 2018.
Next spring will be three years since Congress passed the health care overhaul but, because of a long phase-in, many of the taxes to finance the plan are only now coming into effect. Medicare spending cuts that help pay for covering the uninsured have started to take effect, but they also are staggered. The law's main benefit, coverage for 30 million uninsured people, will take a little longer. It doesn't start until Jan. 1, 2014.
The biggest tax hike from the health care law has a bit of mystery to it. The legislation calls it a "Medicare contribution," but none of the revenue will go to the Medicare trust fund. Instead, it's funneled into the government's general fund, which does pay the lion's share of Medicare outpatient and prescription costs, but also covers most other things the government does.
The new tax is a 3.8 percent levy on investment income that applies to individuals making more than $200,000 or married couples above $250,000. Projected to raise $123 billion from 2013-2019, it comes on top of other taxes on investment income. While it does apply to profits from home sales, the vast majority of sellers will not have to worry since another law allows individuals to shield up to $250,000 in gains on their home from taxation. (Married couples can exclude up to $500,000 in home sale gains.)
Investors have already been taking steps to avoid the tax, selling assets this year before it takes effect. The impact of the investment tax will be compounded if Obama and Republicans can't stave off the automatic tax increases coming next year if there's no budget agreement.
High earners will face another new tax under the health care law Jan. 1. It's an additional Medicare payroll tax of 0.9 percent on wage income above $200,000 for an individual or $250,000 for couples. This one does go to the Medicare trust fund.
Donald Marron, director of the nonpartisan Tax Policy Center, says the health care law's tax increases are medium-sized by historical standards. The center, a joint project of the Brookings Institution and the Urban Institute, provides in-depth analyses on tax issues.
They also foreshadow the current debate about raising taxes on people with high incomes. "These were an example of the president winning, and raising taxes on upper-income people," said Marron. "They are going to happen."
Other health care law tax increases taking effect Jan. 1:
— A 2.3 percent sales tax on medical devices used by hospitals and doctors. Industry is trying to delay or repeal the tax, saying it will lead to a loss of jobs. Several economists say manufacturers should be able to pass on most of the cost.
— A limit on the amount employees can contribute to tax-free flexible spending accounts for medical expenses. It's set at $2,500 for 2013, and indexed thereafter for inflation.

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Partial list of taxes and fees in health overhaul

Partial list of taxes and fees in health overhaul
Starting in 2014, President Barack Obama's health care law will expand coverage to some 30 million uninsured people. At the same time, insurers no longer will be allowed to turn away those in poor health, and virtually every American will be required to have health insurance — through an employer or a government program or by buying it on their own.
For the vast majority of people, the health care law won't mean sending more money to the Internal Revenue Service. But the wealthiest 2 percent of Americans will take the biggest hit, starting next year.
And roughly 20 million people eventually will benefit from tax credits that start in 2014 to help them pay insurance premiums.
A look at some of the major taxes and fees, estimated to raise nearly $700 billion over 10 years.
— Upper-income households. Starting Jan. 1, individuals making more than $200,000 per year, and couples making more than $250,000, will face a 0.9 percent Medicare tax increase on wages above those threshold amounts. They'll also face an additional 3.8 percent tax on investment income. Together these are the biggest tax increase in the health care law.
— Employer penalties. Starting in 2014, companies with 50 or more employees that do not offer coverage will face penalties if at least one of their employees receives government-subsidized coverage. The penalty is $2,000 per employee, but a company's first 30 workers don't count toward the total.
— Health care industries. Insurers, drug companies and medical device manufacturers face new fees and taxes. Companies that make medical equipment sold chiefly through doctors and hospitals, such as pacemakers, artificial hips and coronary stents, will pay a 2.3 percent excise tax on their sales, expected to total $1.7 billion in its first year, 2013. They're trying to get it repealed.
The insurance industry faces an annual fee that starts at $8 billion in its first year, 2014.
Pharmaceutical companies that make or import brand-name drugs are already paying fees; they totaled $2.5 billion in 2011, the first year.
— People who don't get health insurance. Nearly 6 million people who don't get health insurance will face tax penalties starting in 2014. The fines are estimated to raise $6.9 billion in 2016. Average penalty in that year: about $1,200.
— Indoor tanning devotees. The 10 percent sales tax on indoor tanning sessions took effect in 2010. It's expected to raise $1.5 billion over 10 years.
The 28 million people who visit tanning booths and beds each year — mostly women under 30, according to the Journal of the American Academy of Dermatology — are already paying. Tanning salons were singled out because of strong medical evidence that exposure to ultraviolet lights increases the risk of skin cancer.

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Google filing error shocks investors, exposes process

SAN FRANCISCO/NEW YORK (Reuters) - R.R. Donnelley & Sons Co handles thousands of securities filings a year for corporate clients in a routine process that is invisible to most investors. On Thursday Google and its shareholders found out just what happens when that process goes wrong. Google issued a statement blaming Donnelley, its filing agent, after the Internet search company's quarterly results were released by the U.S. Securities and Exchange Commission hours ahead of schedule. Earnings were far less than analysts expected and Google shares immediately plunged as much as 10.5 percent, knocking $26 billion off its market capitalization - the equivalent, as it happens, of about 13 R.R. Donnelleys. It was quickly obvious that a mistake had been made -- the second paragraph of the filing said "PENDING LARRY QUOTE" instead of an actual quote from Google CEO Larry Page -- but it was not clear why. Within minutes, though, an unknown prankster set up a "PendingLarry" Twitter feed to hypothesize what the missing quote might be. Among the highlights: "Man, our privacy was WAY violated today." Donnelley shares lost more than 5 percent after Google started pointing the finger, though they recovered later in the day. The company did not respond to a call for comment, but issued a statement to CNBC in which it said it was investigating the circumstances of the release. Best known as a provider of printing services, Donnelley is also the top SEC filing agent in the country, handling more than 75,000 submissions this year as of mid-October, according to SECInfo.com. Filing agents like Donnelley take paper documents and convert them for submission to the SEC in the appropriate format. The company also owns the filing portal EDGAR Online. WHO GOOFED? It is far from the first time a company's earnings have somehow gotten out early. In late 2010 and early 2011, inadvertent releases - usually by a misplaced release on a website - plagued companies like Walt Disney Co (NYS:DIS) and Microsoft Corp (NSQ:MSFT). The common thread in all of those cases is that investors who are not in the right place at the right time to see the news may suffer for it. "Some who didn't get a chance to sell will try to, and others will be looking for bargains. I'm sure a lot of Google owners were caught off guard," said Randy Frederick, managing director of active trading and derivatives for Charles Schwab in Austin, Texas. After the first question of "who goofed?" was sorted out Thursday afternoon, the second one being asked by investors was "can we sue?" "Everyone is trying to figure out if there's any legal issue with respect to R.R. Donnelley. Google is halted, Donnelley is down big-time on the news since they're allegedly not supposed to have released the information," said Michael Matousek, senior trader at U.S. Global Investors in San Antonio. But one plaintiffs lawyer who sues companies on behalf of investors said shareholders would not have a claim against either Google or R.R. Donnelley because the earnings disclosure was likely a mistake. "There's no fraudulent intent here," said Reed Kathrein with Hagens Berman. R.R. Donnelley may not be entirely off the hook with Google, however. The company could have a negligence claim to recover any additional costs it incurred in responding to the incident, Kathrein said. Any potential damages against R.R. Donnelley could be limited, though, by the contract between the two companies. Late Thursday, Google filed an amended press release with the missing quote and a confirmation that the figures in the original were accurate. R.R. Donnelley shares were up 2 cents at $10.87 in late trading. Google was down 8.1 percent to $693.94 after trading resumed.

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Who Owns America’s Debt?

As the U.S. continues to rack up more than $1 trillion of new debt every year, Americans are beginning to worry about who we owe this money to and how much power our creditors have over us. According to Barry P. Bosworth, a senior fellow at the Brookings Institution, our two biggest foreign creditors are Japan and China. Although it may seem as though our debt to these countries renders us a puppet on strings, Bosworth says this fear is overblown. The U.S. market is very important to China's economy, so China would be loathe to do anything that might exacerbate tensions or disrupt trade between the two countries. And the same can be said for Japan. China owns $1.15 trillion of U.S. government debt -- more than any other country -- but U.S. taxpayers actually owe less money to China compared to recent years. China holds 10% of U.S. Treasuries, down from 12% two years ago. Related: China's Slow Growth 'Marks An End of an Era' But No Hard Landing And what about all the anti-China rhetoric that we hear about on the campaign trail? Republican Presidential Nominee Mitt Romney has been promising the country that he will declare China a "currency manipulator" on the first day of his presidency--and then enact tariffs as necessary until he forces China to level the trading playing field. Is that something that Romney is actually likely to do if he gets elected? No, says Bosworth. Tough talk with respect to China has become standard rhetoric for any presidential challenger. If and when Romney becomes president, his position will likely mellow. Bosworth also says that the problem with the U.S.-China trade relationship is not, as is commonly believed, that China doesn't play fair. China has actually addressed lots of its unfair practices over the past decade, Bosworth says, while the U.S. is still pursuing the same old self-destructive habits. Until we stop consuming so much and start producing more, Bosworth says, we're in no position to demand anything.

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Earnings from McDonald's, Microsoft sink stocks

Poor earnings reports from three companies in the Dow Jones industrial average — Microsoft, General Electric and McDonalds — sent indexes down sharply Friday, marking a sour end to an otherwise strong week in the stock market. McDonald's led a broad drop in the Dow, falling 3 percent. The Dow was down 151 points at 13,397 shortly after noon. "I'm concerned about corporate earnings, but I'm not alarmed yet," said Doug Cote, chief market strategist at ING Investment Management in New York. Cote cautions that it's still early in reporting season, but what's worrying is that companies have reported an overall drop in earnings so far. "And once you get one quarter of negative earnings, it's a precursor," he said. "It's the cockroach theory: if you find one, there's probably many more." The Standard & Poor's 500 sank 17 points to 1,440 and the Nasdaq composite dropped 52 points to 3,020. All 10 industry groups in the S&P 500 fell, led by materials and technology stocks. McDonald's profit sank as a strong dollar hurt international results, which account for two-thirds of its business. The fast-food giant's stock lost $3.51 to $89.35. Microsoft's income fell 22 percent as PC sales took a dive and as troubles in Europe took their toll. Its stock lost 67 cents to $28.82. General Electric, another economic bellwether, fell 3 percent. The company reported stronger profits early Friday but its revenue missed Wall Street's expectations. Orders for new equipment and services sank, mainly because wind turbine orders have fallen because a key U.S. federal subsidy for wind power expires at the end of the year. GE's stock lost 60 cents to $22.21. Analysts currently expect companies in the S&P 500 to post their worst earnings results since the third quarter of 2009, according to S&P Capital IQ. Banks and consumer discretionary companies are projected to report the best growth. Analysts expect companies dealing in metals and other materials to report the worst results, followed by energy companies. But it's technology companies like IBM, Intel and Google whose weak results have grabbed the most attention so far. Weak earnings from Google and a rise in claims for unemployment benefits helped pull the stock market lower Thursday. That snapped a four-day run of gains for the Dow. Google fell again Friday, giving up $14.14 to $680.86. The Dow is still up 0.6 percent for the week. The S&P 500 up is up 0.8 percent. In other Friday trading, the yield on the 10-year Treasury note slipped to 1.77 percent from 1.83 percent late Thursday. Among other stocks making big moves, Chipotle Mexican Grill plunged 14 percent after the burrito chain forecast that revenue growth would slow sharply next year. The stock had been a favorite among investors thanks to super-fast growth in recent years. The stock fell $41.32 to $244.61.

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US housing construction up 15 percent in September

U.S. builders started construction on single-family homes and apartments in September at the fastest rate since July 2008, a further indication that the housing recovery is strengthening. The Commerce Department said Wednesday that builders broke ground on homes at a seasonally adjusted annual rate of 872,000 in September. That's an increase of 15 percent from the August level. Applications for building permits, a good sign of future construction, jumped nearly 12 percent to an annual rate of 894,000, also the highest since July 2008. [Click here to see home loan rates in your area.] The strength in September came from both single-family construction, which rose 11 percent, and apartments, which increased 25.1 percent. Construction activity is now 82.5 percent higher than the recession low hit in April 2009. Activity is still well below the roughly 1.5 million rate that is consistent with healthier markets. Still, the surge in construction suggests builders believe the housing rebound is durable. Builder confidence reached at a six-year high this month, according to a survey by the National Association of Home Builders. The group's index of builder sentiment rose to a reading of 41. While that's still below the level of 50 that signals a healthy market, it has steadily climbed over the past year from a reading of 17. Sales of new and previously owned homes have been slowly improving this year, and home prices are starting to show consistent gains. Record-low mortgage have encouraged more people to buy. And the Federal Reserve's aggressive policies could push long-term interest rates even lower, making home-buying affordable for the foreseeable future. Housing is expected to keep improving next year. But many economists say economic growth will stay muted until companies step up hiring and consumers start spending more. Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the home builders group.

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McDonald's Canada Reveals How They Make Famous Fries

McDonald's Canada is at it again, demystifying their french fry recipe "from the farm to all the way to the fryer." In their new behind-the-scenes video, Scott Gibson, manager of the company's supply chain, takes customer questions on their world-famous fries. Gibson addresses the first question asking whether or not the potatoes used by the fast food restaurant are real. Standing in the middle of the Levesque farm with farmer Angelo Levesque, the two discuss how the potatoes are harvested and sorted at the farm. Then they are then brought to McCain, the company's fries supplier, to be prepped before heading to stores. SLIDESHOW: Fast Food Ads vs. Reality: How Do They Size Up? Mario Dupuis, production manager at McCain, describes how they prepare the fries by washing the potatoes to remove the rocks and the dirt and put them through a "peeling system." Afterwards, they are cut and blanched "to remove the natural sugars from the strips, this will prevent some variation in the color once we cook the product," said McCain. Next they are washed in a textural solution to give it the "nice even coat we see in the restaurants," said McCain, adding they also use an ingredient on the strips to prevent the fries from greying or oxidizing. Afterwards, they are then dried and fried for 45 to 60 seconds. Finally, they are frozen, packaged and shipped to stores. Once in stores, the fries are deep-fried in 100 percent vegetable oil. They are salted with about 1 tablespoon of salt per four orders of medium fries. For those concerned about salt intake, Gibson suggests that customers can order their fries without the salt.

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Actor Depardieu hits back at French PM over tax exile

Actor Gerard Depardieu, accused by French government leaders of trying to dodge taxes by buying a house over the border in Belgium, retorted that he was leaving because "success" was now being punished in his homeland. A popular and colourful figure in France, the 63-year-old Depardieu is the latest wealthy Frenchman to seek shelter outside his native country after tax increases by Socialist President Francois Hollande. Prime Minister Jean-Marc Ayrault described Depardieu's behavior as "pathetic" and unpatriotic at a time when the French are being asked to pay higher taxes to reduce a bloated national debt. "Pathetic, you said pathetic? How pathetic is that?" Depardieu said in a letter distributed to the media. "I am leaving because you believe that success, creation, talent, anything different must be sanctioned," he said. An angry member of parliament has proposed that France adopt a U.S.-inspired law that would force Depardieu or anyone trying to escape full tax dues to forego their nationality. The "Cyrano de Bergerac" star recently bought a house in Nechin, a Belgian village a short walk from the border with France, where 27 percent of residents are French nationals, and put up his sumptuous Parisian home up for sale. Depardieu, who has also inquired about procedures for acquiring Belgian residency, said he was handing in his passport and social security card. Culture Minister Aurelie Filippetti said she was outraged by Depardieu's letter, adding that he had for years been supported financially by public money for the film industry. "When we abandon the ship and desert in the middle of an economic war, you don't then come back and give morality lessons," she told BFM-TV. "One can only regret that Gerard Depardieu doesn't make a comeback in silent movies." He said he had paid 145 million euros ($190.08 million) in taxes since beginning work as a printer at the age of 14. "People more illustrious than me have gone into (tax) exile. Of all those that have left none have been insulted as I have." The actor's move comes three months after Bernard Arnault, chief executive of luxury giant LVMH and France's richest man, caused an uproar by seeking to establish residency in Belgium - a move he said was not for tax reasons. Belgian residents do not pay wealth tax, which in France is now levied on those with assets over 1.3 million euros ($1.7 million). Nor do they pay capital gains tax on share sales. "We no longer have the same homeland," Depardieu said. "I sadly no longer have a reason to stay here. I'll continue to love the French and this public that I have shared so much emotion with." Hollande is pressing ahead too with plans to impose a 75-percent supertax on income over 1 million euros. "Who are you to judge me, I ask you Mr. Ayrault, prime minister of Mr. Hollande? Despite my excesses, my appetite and my love of life, I remain a free man.

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Leah Remini sued by former managers over "Family Tools" commissions

Leah Remini's new TV gig is already giving her a headache, months before it even starts. Former "King of Queens" star Remini is being sued by her former managers, the Collective Management Group, which claims that it's owed $67,000 in commissions relating to her upcoming ABC comedy "Family Tools," which debuts May 1. In a complaint filed with Los Angeles Superior Court on Tuesday, the Collective says that it entered into an agreement with the actress in November 2011 that guaranteed the company 10 percent of the earnings that emerged from projects that Remini "discussed, negotiated, contemplated, or procured/booked during Plaintiff's representation of Remini," regardless of whether the income was earned after she and the Collective parted ways. According to the lawsuit, that would include the $1 million that it says Remini will earn for the first season of "Family Tools." (The suit allows that it isn't owed commission on a $330,000 talent holding fee that Remini received from ABC prior to officially being booked on the show.) Remini, pictured above wearing the self-satisfied smirk of someone who just might stiff her former managers out of their commission, terminated her agreement with the Collective "without warning or justification" in October, the suit says. Alleging breach of oral contract among other charges, the suit is asking for an order stipulating that it's owed the $67,000, plus unspecified damages, interest and court costs. Remini's agent has not yet responded to TheWrap's request for comment.

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