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MADRID -- Spain's already fragile banking sector was shocked Thursday by the news that Emilio Botin, the country's most influential banker and chairman of Banco Santander, and 11 of his relatives were the subjects of an investigation into tax evasion stretching back to accounts that ostensibly were opened during the dark days of the Spanish Civil War. The national court in Madrid said it had agreed to hear an investigation by antifraud prosecutors from the Spanish tax agency into past income tax returns filed by Mr. Botin and his relatives. [ABSTRACT FROM PUBLISHER]

ALBANY -- Standing last week before a closed-door meeting of the Assembly Democrats he has led for the better part of two decades, Sheldon Silver laid out the grim reality. The hospitals and health care unions, the Democrats' traditional allies in the annual budget fight, had abandoned them. Gov. Andrew M. Cuomo would offer no additional money for schools and senior centers and no income tax surcharge on the wealthy. If they refused his terms, Mr. Cuomo would wield his emergency budget powers to ram through even steeper cuts. And if they forced a government shutdown, Mr. Silver explained, it would be the widely reviled Legislature -- not the popular governor -- that would be blamed. [ABSTRACT FROM AUTHOR]

As state governments struggle with the fiscal damage caused by the recession, an income tax increase has become a rarely used remedy. Governor after governor has publicly forsworn the prospect of raising income taxes, preferring to talk layoffs and cuts in programs and public union benefits. To cite prominent examples, Democrat Andrew M. Cuomo of New York and Republican Chris Christie of New Jersey have ruled out income tax increases. [ABSTRACT FROM AUTHOR]

WHEN corporations like Exxon, State Farm and Phillip Morris lose tort cases, juries occasionally award, in addition to compensation for the plaintiff's injuries, extensive punitive damages. But jurors are often unaware that companies are able to deduct those punitive damages in calculating their federal income taxes, saving them millions of dollars and undermining the original goal of the damages: to punish reprehensible corporate behavior. [ABSTRACT FROM PUBLISHER]

PARIS -- Under pressure from anxious lenders, the French government took steps on Wednesday to help reassure markets about its creditworthiness, announcing that it would raise the retirement age and increase income taxes on the rich to help rein in its budget deficit. And the Spanish government, also facing concerned investors, proposed loosening labor rules on Wednesday in a bid to restart its stalled economy. The central bank said it would release the results of ''stress tests'' on Spanish banks to demonstrate their resilience to shocks. [ABSTRACT FROM PUBLISHER]