Finance news. My opinion.

A tax credit meant to help millions of small businesses afford health coverage for their employees was claimed by only 170,300 last year, a government watchdog has found.

The Government Accountability Office report, made public this week, is the latest to highlight the shortcomings of the tax credit, which has been criticized for being too weak and complex.

The report noted that only a fraction of those eligible have used the assistance. Between 1.4 million and 4 million small businesses were eligible for the tax credit, according to GAO.

The tax credit, enacted as part of the 2010 Affordable Care Act, is aimed at defraying the high cost of health coverage. It is available to companies that have 25 or fewer workers, pay average salaries of $50,000 or less and cover at least half of employee health insurance premiums.

Health care reform isn’t a job killer - yet

Many small employers have told CNNMoney that they found the tax credit program to be too confusing — and often too costly — to be worth the accounting endeavor.

So many small firms are forgoing the extra cash that $20 billion dollars meant to go to small businesses over the next decade won’t be distributed, according to the Congressional Budget Office.

The GAO report noted the credit "was not large enough to incentivize employers to begin offering insurance." According to the report, the average credit was $2,700.

Worse still, company owners were deterred from making claims because of the confusing way the credit is calculated online payday loan lenders. The formula includes odd features, such as counting some workers as 1/15th of an employee and reducing federal help if a firm insures more workers.

The GAO suggested that the Internal Revenue Service revise its procedures and take a softer approach with companies that make mistakes on credit applications.

Included in the report was a response from IRS Deputy Commissioner Steven Miller, who agreed with some suggestions but said his agency had conducted "significant outreach" to small businesses.

President Obama has also suggested changes that would simplify and expand the tax credit for businesses this year.

A Treasury Department spokesperson on Tuesday noted that new tax credits take some time to gain popularity and that the IRS plans to ramp up outreach.

Treasury had previously told CNNMoney that nearly 309,000 small businesses received the credit for 2010 as of late last year. That number counted individual partners at firms, not actual employers.

It is possible the entire tax credit program could be scrapped depending on how the U.S. Supreme Court rules in the case challenging the 2010 law’s constitutionality. A ruling is expected next month. 

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Quote and apply online or speak with an agent in your area. Compare health insurance plans for individuals and families.

Treasuries pared losses as German and French finance ministers meet before a summit of regional leaders to discuss ways to contain the European debt crisis, stoking demand for government debt.

U.S. 10-year yields rose earlier on speculation record-low yields may limit demand as the government auctions $99 billion of coupon-bearing debt this week starting tomorrow. The U.S. will start this week

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We have to hope at this moment that JP Morgan Chase & Co. (JPM), America

The European Commission has called on EU nations to stick to their promised budget cuts despite voter discontent in France and Greece, but promised new efforts to boost growth to alleviate economic hardship.

EU President Herman Van Rompuy also called for an impromptu informal summit of the 27 EU government leaders on May 23 to discuss economic growth and to prepare for a summit in June focused on job-boosting measures.

In elections on Sunday, voters in France and Greece gave strong support to parties who want to roll back or slow down the spending cuts and tax increases that have defined Europe’s response to its debt crisis.

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Kellwood Co. has appointed Jill Granoff, former head of Kenneth Cole Productions, Inc., to be its new chief executive officer.

The Town and Country-based apparel company has diverse portfolio of brands including Vince, Rebecca Taylor, David Meister, Lamb & Flag, Baby Phat, and Sag Harbor.

Granoff replaces Michael Kramer, who left to become chief operating officer of J.C. Penney.

She was also formerly an executive vice president of Liz Claiborne Inc. where she was in charge of the worldwide business of Juicy Couture, Lucky Brand Jeans, and Kate Spade payday loans. She has also held executive positions with Victoria’s Secret Beauty and Estee Lauder Inc.

“I am excited about the opportunity to partner with Kellwood and Sun Capital to optimize the brand portfolio and enhance overall business performance,” she said in a statement. “We have a great platform to accelerate growth and profitability.”

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Employers in the U.S. announced more job cuts in April than a year earlier, led by education and government agencies.

Planned firings rose 11 percent to 40,559 from April 2011, according to figures released today by Chicago-based Challenger, Gray & Christmas Inc. The monthly average of 45,913 cuts through the first four months of this year is lower than the full-year average of 50,507 for 2011.

Employers in education, government, and the consumer goods and transportation industries are easing the pace of dismissals even as they continue to trim headcount, the report said. Job creation in the world

Delinquent taxes paid by Roberts brothers • Michael and Steven Roberts bought a little breathing room for their beleaguered Roberts Mayfair Hotel on Monday. Roberts Hospitality Services paid off delinquent state sales taxes on the Mayfair, and $15,000 toward a sales tax bond, according an order issued by Circuit Judge Joan Moriarty in a lawsuit filed by the Missouri Department of Revenue. The state last month sued to close two Roberts hotels — the Mayfair and their Comfort Inn in the Central West End — over $212,000 in unpaid taxes. The state is seeking a larger bond on the Mayfair. Taxes on the Comfort Inn are still outstanding. (Tim Logan)

Bakers Footwear sales drop • A company executive for St. Louis-based Bakers Footwear Group Inc. blamed a drop in sales and profit in the fiscal fourth quarter in part on a “difficult dress boot season.” Net income was $3.4 million, or 36 cents a share, in the quarter ended Jan. 28, compared with $5.2 million, or 54 cents a share, in the same period a year ago. Net sales dropped 8 percent, to $53.6 million. (Kavita Kumar)

Reliance posts a profit • Reliance Bancshares Inc no teletrack payday loan. swung to a profit in the first quarter, boosted by a $2.5 million gain from the sales of investment securities. The bank holding company posted a net income of $719,000, compared with a loss of $5.2 million a year earlier. Frontenac-based Reliance is the holding company for Reliance Bank, which has 20 local branches. (Gregory Cancelada)

Reinsurance Group adjusts accounting • Reinsurance Group of America reported first quarter income of $123.3 million, or $1.67 per share, compared with $148.9 million, or $2.02 per share, in the corresponding period last year. The company said amounts for last year were adjusted for the retrospective adoption of new accounting guidance for deferred acquisition costs. Consolidated net premiums rose 7 percent, to $1.86 billion, from $1.74 billion. Reinsurance Group, based in Chesterfield, is among the largest global providers of life reinsurance. (Tim Bryant)

Read more business news at stltoday.com/business

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No central banker in the world

Singapore’s central bank tightened its monetary policy Friday by allowing for a stronger currency to combat the island’s stubbornly high inflation rate.

A jump in global oil prices since October has quickened inflation to near 5 percent in Singapore, which imports all of its fuel. A stronger Singapore dollar would lower the prices of imports while possibly making the country’s exports less competitive.

Unlike most central banks, The Monetary Authority of Singapore uses currency, rather than a benchmark lending rate, to help control money supply. The bank’s statement Friday indicated it would allow the Singapore dollar to rise at a faster rate.

The shift in policy will likely speed the rate of appreciation by one percentage point to between 2 percent and 3 percent a year, said Robert Prior-Wandesforde, director of Asian economics at Credit Suisse in Singapore.

Besides Singapore and Indonesia, policymakers in Asia will likely hold steady or ease monetary policy amid concern about slowing economic growth, Prior-Wandesforde said.

“We doubt Singapore’s monetary tightening move will be replicated in Asia this year,” he said. “The crucial difference is the fact that Singapore inflation is comparatively high.”

The central bank also raised its inflation forecast for this year by one percentage point to between 3.5 percent and 4.5 percent.

“Inflation has come in stronger than expected since October and will remain elevated over the next few months,” the central bank said in its biannual monetary policy statement. “External inflationary pressures are likely to be sustained, largely due to higher oil prices.”

The central bank sets a trading range for the Singapore dollar though doesn’t publicly disclose the details. It intervenes to keep the currency inside the trading band.

The government also released first quarter preliminary growth figures Friday based on data mostly from January and February. The city-state’s economic growth slowed to 1.6 percent in the first quarter from a year earlier, the trade and industry ministry said. The government is forecasting growth of 1 percent to 3 percent this year, down from 4.9 percent last year.

However, compared with the fourth quarter, the economy expanded a seasonally adjusted, annualized 9.9 percent and avoided a recession after falling 2.5 percent in the October to December period. Manufacturing, led by pharmaceuticals and electronics, rebounded strongly in the first quarter from a contraction in the fourth, buoyed by better than expected global demand.

Construction and services also improved compared with the fourth quarter.

“Today’s message is clear: Singapore is reaccelerating,” DBS bank said in a report.

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Avon Products Inc. says it has tapped one-time Johnson & Johnson executive Sherilyn S. McCoy as its new CEO as the struggling beauty products company looks to regain its past luster.

McCoy will take over the post from Andrea Jung, who will stay on as executive chairman.

Founded in 1886, Avon became a fixture in households across the country as its legions of “Avon ladies” went door to door selling makeup to family, friends and acquaintances.

But North American sales have dropped and its profit has shrunk easy to get unsecured personal loans. Investors and analysts had blamed Jung for being slow to react to declining results and wrap up a bribery investigation that began in China and spread elsewhere.

Avon said Monday that the 53-year-old McCoy will become CEO and a board member effective April 23.

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