Tags: BofA | Moynihan | Obama | Tax | Deal | Hiring

BofA's Moynihan: Obama Tax-Cut Deal May Prompt Firms to Hire More

Wednesday, 08 Dec 2010 07:34 AM

President Barack Obama’s agreement to extend current tax rates may help prompt U.S. business owners to boost hiring, said Bank of America Corp. Chief Executive Officer Brian Moynihan.

“The attitudinal switch helps when the people are saying, ‘Okay, they’re trying, and they’re helping us,’” Moynihan, 51, said in an interview with Bloomberg Television.

Companies have mostly refrained from hiring as they wait to see signs of economic growth in the wake of the worst recession in decades. The Labor Department said last week the unemployment rate rose to a seven-month high of 9.8 percent in November even as data showed sales at retailers climbed by the most in eight months.

Obama said Dec. 6 that he’ll agree to a two-year extension of all Bush-era tax cuts in exchange for extending federal unemployment insurance, moving to break a stalemate with Republicans before Congress adjourns. The current tax rates, enacted in 2001 and 2003, are set to expire Dec. 31. His plan would cut the payroll tax by 2 percentage points.

“What’s probably most important is to have the attitude that, ‘Yes, I will hire more, yes, I will do more, because I think that I’m being supported,’” Moynihan said. Some of his remarks will be aired today, and the full interview will be shown tomorrow on “InBusiness with Margaret Brennan.”

In addition to keeping the current tax rates for all Americans, the plan outlined by Obama would extend aid for the long-term unemployed for another 13 months.

Looking Forward

Bank of America will boost its dividend from the current penny a share “as fast as we can,” Moynihan said yesterday at a conference in New York. The Charlotte, North Carolina-based company is the largest U.S. lender by assets.

“Our view is, as we look forward, we will return through dividends to about 30 percent of the earnings” and the rest will be for share repurchases, Moynihan said in the Bloomberg Television interview. The quarterly payout was as high as 64 cents a share in 2008.

The lender slipped 7 cents yesterday to $11.57 in New York Stock Exchange composite trading. The company has declined 23 percent this year.

Bank of America is “wholly unaffected” by previous activities that led the lender to pay $137 million in restitution for involvement in rigging bids on municipal bonds because the actions stopped years ago, Moynihan said.

“We made all the changes years and years ago, so what goes on downstairs here on that desk is wholly unaffected,” he said.

The firm agreed to pay $36 million to settle a U.S. Securities and Exchange Commission case tied to 88 municipal bond contracts and an additional $101 million to resolve investigations by other federal and state agencies, the SEC said yesterday.

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President Barack Obama s agreement to extend current tax rates may help prompt U.S. business owners to boost hiring, said Bank of America Corp. Chief Executive Officer Brian Moynihan. The attitudinal switch helps when the people are saying, Okay, they re trying, and they...
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