Obama Wins 2012 Election: Why Your Taxes Are Going Up

When President Obama and the new Congress begin to tackle important legislation and federal policy in January, one of the key issues will be how to reform America's byzantine tax code.

Obama campaigned on a platform to raise taxes on the wealthiest Americans, declaring that millionaires and billionaires need to "pay their fair share." The president proposed the highly controversial "Buffett Rule," which would make sure those individuals earning more than $1 million a year would pay at least 30% of their income in federal taxes.

Related: Do the Rich Have a Moral Obligation to Pay Higher Taxes? Gov. Jerry Brown Says 'Yes'

The top individual tax rate is currently 35% but few U.S. households and individuals actually pay that much; various tax deductions and loopholes reduce one's tax burden.

According to the Obama campaign, the richest 400 taxpayers in 2008 (who each made more than $110 million that year) paid an average income tax rate of just 18%. In 2009 over 20,000 U.S. households with more than $1 million in income paid a federal tax rate of less than 15%.

Obama has vowed to raise the top income tax rate for individuals to 39.6% and let the Bush-era tax breaks end for the highest income earners. The majority of Americans — those who are lower to middle class — could also see a 2% tax increase if Congress allows the temporary payroll tax holiday to expire at the end of the year.

Related: Here's Why Your Taxes Are Going Up 2% Next Year: Just Explain It

Nearly half of voters support raising taxes on incomes over $250,000, according to Tuesday night's exit polls.

Len Burman, a professor of public affairs at Syracuse University and a co-founder of the bipartisan Tax Policy Center, believes higher tax rates play just a small role in resolving the nation's budget woes.

"In the long term [Obama] is going to need to raise taxes on more than just the rich," Burman says in an interview with The Daily Ticker. "The budget problem isn't going to be solved without broader-based tax increases, preferably done in the context of tax reform and also serious entitlement reform. We're not going to be able to solve this on the tax side alone."

Burman, who recently co-wrote the new book "Taxes in America: What Everyone Needs to Know," says tax rates do not need to be raised for any income group if Congress and the White House would agree on one simple change: raising the capital gains rate, i.e. the profits from the sale of an investment. Assets, such as stocks, art or real estate, that are held for at least a year are currently taxed at a special 15% rate; Obama wants to raise that to 20%.

"The problem with a low tax rate on capital gains is not that it allows Mitt Romney and Warren Buffett to pay very low taxes but that it creates this huge opportunity for tax sheltering," he notes. "There's a whole industry that's devoted to coming up with these schemes. [Raising capital gains rates] could make the tax system more progressive and allow for lower tax rates" and a reduction in the deficit Burman says.

Obama's tax proposal also targets the Alternative Minimum Tax, the Estate Tax and as well as many personal tax credits and itemized deductions. Obama would make permanent the 2007 AMT patch and index it for inflation. He would raise the estate tax to 45% from 35% on estates worth more than $3.5 million. He would lower the corporate tax rate to 28% from 35% and provide a refundable $3,000 credit per added employee for companies that expand their workforce. He would tax carried interest as ordinary income.

Related: Corporate Tax Loopholes=Corporate Socialism: Pulitzer Prize Winner David Cay Johnston

A divided Congress refused to compromise with Obama during his first term and could very well dismiss the president's tax reforms for the next four years. Republicans are loathe to raise taxes by even a penny and Obama has said he would veto any budget bills that did not include tax increases. Neither party wants to raise taxes in a weak economy. But the options available for reducing the deficit and generating new revenue are few and far between.

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Wall Street sinks after election as "fiscal cliff" eyed

NEW YORK (Reuters) - The Dow industrials lost more than 300 points in a sell-off on Wednesday that drove all major stock indexes down over 2 percent in the wake of the presidential election as investors' focus shifted to the looming "fiscal cliff" debate and Europe's economic troubles.

The Standard & Poor's 500 Index posted its biggest daily percentage drop since June, with all 10 S&P sectors solidly lower and about 80 percent of stocks on both the New York Stock Exchange and the Nasdaq ending in negative territory. Both the Dow and the S&P 500 closed at their lowest levels since early August.

Financial stocks and energy shares, two sectors that could face increased regulation after President Barack Obama's re-election, were the weakest on the day. The S&P financial index (.GSPF) lost 3.5 percent, while the S&P energy index (REU:^GSPEI) fell 3.1 percent. An S&P index of technology shares (.GSPT) slid 2.8 percent as the stock of Apple Inc (AAPL) entered bear market territory.

Obama's victory had been anticipated, though many polls indicated a close race between the president and Mitt Romney, his Republican challenger, going into election day.

The election was considered a major source of uncertainty for the market, but now the focus turns to the fiscal cliff, with investors worrying that if no deal is reached over some $600 billion in spending cuts and tax increases due to kick in early next year, it could derail the economic recovery.

The Republican Party retained control of the U.S. House of Representatives, while the Senate remained under Democratic control.

David Joy, chief market strategist at Ameriprise Financial in Boston, said this kind of divided government was disappointing "since that configuration has resulted in gridlock and there's no clear path towards unlocking that.

"It holds implications for how quickly we resolve the fiscal cliff issue, or whether it gets resolved at all," said Joy, who helps oversee $571 billion in assets.

The market's losses were broad, with pessimism exacerbated by overseas concerns after the European Commission said the region would barely grow next year, dashing hopes for improvement in the short term.

Still, some viewed the day's slide as a buying opportunity, saying it was unlikely that no deal would be reached on the fiscal cliff and arguing that Europe's troubles were already priced into markets.

"There's no question that Europe is lagging the rest of the developed and emerging world, but stocks will find a base soon, when investors start seeing through some of the smoke over the region and cliff," said Richard Weiss, who helps oversee about $120 billion in assets as a senior money manager at American Century Investments in Mountain View, California.

The Dow Jones industrial average (^DJI) slid 312.95 points, or 2.36 percent, to close at 12,932.73. The Standard & Poor's 500 Index (^GSPC) fell 33.86 points, or 2.37 percent, to 1,394.53. The Nasdaq Composite Index (^IXIC) lost 74.64 points, or 2.48 percent, to close at 2,937.29.

The S&P 500 closed below the key 1,400 level for the first time since August 30, while the Dow ended under 13,000 for the first time since August 2.

About 7.81 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, slightly below last year's daily average of 7.84 billion, though Wednesday's volume did surpass that of many recent sessions.

Contributing to the Nasdaq's decline, Apple shares fell 3.8 percent to $558, off 20.8 percent from an all-time intraday high of $705.07 set on September 21. That slump puts the stock of the world's most valuable publicly traded company in bear market territory.

Despite Wednesday's sell-off, all three major U.S. stock indexes were still up for the year. At Wednesday's close, the Dow was up 5.9 percent for 2012 so far, while the S&P 500 was up 10.9 percent and the Nasdaq was up 12.8 percent.

Wednesday's plunge was a reversal from Tuesday's rally when voting was under way. Defense and energy shares were among the market leaders that day, causing speculation that some investors were betting on a Romney win.

On Wednesday, an index of defense shares (.DFX) fell 2.9 percent, its biggest one-day drop in a year. Shares of United Technologies (UTX) dropped 2.9 percent to $77.68 while Lockheed Martin (LMT) sank 3.9 percent to $91.15.

Energy shares fell as investors bet that the industry may see increased regulation in Obama's second term, with less access to federal lands and water. Crude oil shed more than 4 percent while an index of coal companies (.DJUSCL) plunged 8.8 percent. Coal firms Peabody Energy (BTU) lost 9.6 percent to $26.24 and Arch Coal (ACI) sank 12.5 percent to $7.58.

Among financials, JPMorgan Chase & Co (JPM) fell 5.6 percent to $40.46 and Goldman Sachs (GS) dropped 6.6 percent to $117.98.

"The notion that you may have gotten a respite on the financial services side (with regulation) if Romney had been elected is obviously being unwound," said Mike Ryan, chief investment strategist at UBS Wealth Management Americas in New York.

Healthcare stocks were mixed as President Obama's re-election rules out the possibility of a wholesale repeal of his healthcare reform law, though questions remain as to what parts of the domestic policy will be implemented. The S&P health care index (REU:^GSPAI) shed 1.9 percent. In contrast, Tenet Healthcare (THC) was the S&P 500's biggest percentage gainer, up 9.6 percent at $27.34.

In 2008, stocks also rallied on election day, but then fell by the largest margin on record for a day following the vote, with each of the three major U.S. stock indexes posting losses ranging from 5 percent to 5.5 percent.

After the bell, both Qualcomm Inc (QCOM) and Whole Foods Market Inc (WFM) reported results. Qualcom's revenue beat expectations, sending shares up 8 percent to $62.75 in extended trading, while Whole Foods dropped 3.3 percent to $92.75 after the bell. In the regular session, Qualcomm slid 3.7 percent to close at $58.12, while Whole Foods dropped 2.1 percent to $95.93.

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Coal company announces layoffs in response to Obama win

A coal company headed by a prominent Mitt Romney donor has laid off more than 160 workers in response to President Obama's election victory.

Murray Energy said Friday that it had been "forced" to make the layoffs in response to the bleak prospects for the coal industry during Obama's second term. In a prayer circulated by the company, CEO Robert Murray said Americans had voted "in favor of redistribution, national weakness and reduced standard of living and lower and lower levels of personal freedom."

"The American people have made their choice. They have decided that America must change its course, away from the principals of our Founders," Murray said in the prayer, which was delivered in a meeting with staff members earlier this week.

"Lord, please forgive me and anyone with me in Murray Energy Corporation for the decisions that we are now forced to make to preserve the very existence of any of the enterprises that you have helped us build."

Murray cited pending regulations from the Environmental Protection Agency and the possibility of a carbon tax as factors that could lead to the "total destruction of the coal industry by as early as 2030."

In August, Murray shuttered an operation in Ohio, again blaming the Obama Administration and its alleged "war on coal."

Mitt Romney echoed this line on the campaign trail, accusing Obama of undermining the country's energy security.

Administration officials responded to these attacks by affirming that Obama supports "clean coal." They also pointed out that more coal miners were on the job in the U.S. this year than at any time since 1997, and that U.S. coal exports have risen 31%.

Domestically, however, coal production has dropped sharply, falling roughly 15% in 2011 versus years prior, according to the National Mining Association.

But the industry's woes go way beyond Obama's policies.

Utility companies are increasingly ditching coal in favor of cheaper, cleaner natural gas. In addition, the recession and improved energy efficiency have crimped demand for power.

Looking ahead, the coal industry faces a rule going into effect in 2015 that tightens the amount of mercury coal plants can emit, as well as regulations on mountain-top mining. Both will make coal production and coal-fired power plants more expensive.

The rules themselves are not Obama's doing, although he has implemented them fairly quickly. Most stem from the Clean Air Act, which was signed by Richard Nixon and strengthened during the first Bush presidency.

CNNMoney's Steve Hargreaves contributed reporting.

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U.S. to Pass Saudi Arabia in Energy Production, IEA Says: Huge Foreign Policy, Economic Implications

A new report by the International Energy Association says the U.S. will become the world's largest oil producer by 2017, overtaking current leaders Saudi Arabia and Russia. U.S. energy policies initiated by the George W. Bush administration and implemented by President Barack Obama have moved the U.S. toward energy independence and away from Middle East energy sources. U.S. oil production has risen rapidly since 2008 and oil imports are at their lowest level in two decades.

"North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world, yet the potential also exists for a similarly transformative shift in global energy efficiency," says IEA Executive Director Marian von der Hoeven in a statement.

The IEA also says the U.S. could become self-sufficient in energy by 2035 and a net exporter of natural gas by 2020. The Obama administration's push to develop and grow domestic natural gas capabilities has led to a natural gas drilling boom. Production has jumped 15% in four years but the glut in natural gas supplies have also caused the price of natural gas to plummet. According to the White House, the U.S. holds a 100-year supply of natural gas and domestic production is at an all-time high. The Daily Ticker's Aaron Task and Henry Blodget both agree that the explosion in domestic energy production could alter the geopolitical landscape and U.S. labor market.

"The foreign policy implications are maybe even bigger than the economic ones," says Task.

"For 50 years or more we have been just addicted and coupled to a region of the world where so many people hate us," Blodget adds.

Oil and petroleum imports have fallen an average of more than 1.5 million barrels per day and domestic crude oil production has increased by an average of more than 720,000 barrels per day since 2008. As domestic drilling has expanded so has the number of oil and gas production jobs. According to the Federal Reserve Bank of St. Louis, job growth in these industries has risen 25% since January 2010.

Related: The Fracking Revolution: More Jobs and Cheaper Energy Are Worth the "Manageable" Risks, Yergin Says

President Obama says natural gas production could support 600,000 jobs by the end of the decade. Most of these positions are highly desirable from a financial standpoint. Drilling and support jobs pay about $34.50 an hour, 50% more than the national average according to The New York Times.

Cheap natural gas and the administration's eagerness to expand U.S. energy production has shifted resources away from green energy technologies like solar and wind.

Related: Robert F. Kennedy Jr.: Renewable Energy Is Key to U.S. Growth

The method of extracting natural gas from shale rock formations has come under intense scrutiny. Many local cities and communities have already banned the practice. Hydraulic fracturing, more commonly referred to as hydrofracking or fracking, involves injecting large amounts of sand, water and chemicals into the ground at high pressures. Critics of fracking say this process produces millions of gallons of wastewater that contain highly corrosive salts and carcinogens. These radioactive elements could pollute water sources such as rivers and underground aquifers and pose serious dangers to the environment and individuals.

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Eurozone back in recession in Q3

LONDON (AP) -- The 17-country eurozone has bowed to the inevitable and fallen back into recession for the first time in three years as a sprawling debt crisis took its toll on the region's stronger economies.

And with surveys pointing to increasingly depressed conditions across the eurozone at a time of high unemployment in many countries, there are fears that the recession will deepen, and make the debt crisis even more difficult to handle.

Official figures Thursday showed that the eurozone contracted by 0.1 percent in the July to September period from the quarter before as economies including Germany and the Netherlands suffer from falling demand.

The decline reported by Eurostat, the EU's statistics office, was in line with market expectations and follows on from the 0.2 percent fall recorded in the second quarter. As a result, the eurozone is officially in recession, commonly defined as two straight quarters of falling output.

"We can dispense with the euphemisms and equivocation, and openly proclaim that the euro area economy is indeed in technical recession," said James Ashley, senior European economist at RBC Capital Markets.

Because of the eurozone's grueling three-year debt crisis, the region has the focus of concern for the world economy. The eurozone's economy is worth around €9.5 trillion, or $12.1 trillion, which puts it on a par with the U.S. economy. The region, with its 332 million population, is the U.S.'s largest export customer, and any fall-off in demand will hit order books.

While the U.S has managed to bounce back from its own savage recession in 2008-09, albeit inconsistently, and China continues to post still-strong growth, Europe's economies have been on a downward spiral — and there is little sign of any improvement in the near-term.

The eurozone has managed to avoid returning to recession for the first time since the financial crisis following the collapse of U.S. investment bank Lehman Brothers, mainly thanks to the strength of its largest single economy, Germany.

But even that country is struggling now as confidence wanes and exports drain in light of the debt problems afflicting large chunks of the eurozone.

Germany's economy grew a muted 0.2 percent in the third quarter, down from a 0.3 percent increase in the previous quarter. Over the past year, Germany's annual growth rate has more than halved to 0.9 percent from 1.9 percent.

Perhaps the most dramatic decline among the eurozone's members was seen in the Netherlands, whose economy shrank 1.1 percent on the previous quarter.

Five eurozone countries are in recession — Greece, Spain, Italy, Portugal and Cyprus. Those five are also at the center of Europe's debt crisis and are imposing austerity measures, such as cuts to pensions and increases to taxes, in an attempt to stay afloat.

As well as hitting workers' incomes and living standards, these measures have also led to a decline in economic output and a sharp increase in unemployment.

Spain and Greece have unemployment rates of over 25 percent. Their young people are faring even worse with every other person out of work. As well as being a cost to governments who have to pay out more for benefits, it carries a huge social and human cost.

Protests across Europe on Wednesday highlighted the scale of discontent and with economic surveys pointing to the downturn getting worse, the voices of anger may well get louder still.

"The likelihood is that this anger will continue to grow unless European leaders and policymakers start to act as if they have a clue as to how to resolve the crisis starting to unravel before their eyes," said Michael Hewson, markets analyst at CMC Markets.

The wider 27-nation EU, which includes non-euro countries, avoided the same fate. It saw output rise 0.1 percent during the quarter, largely on the back of an Olympics-related boost in Britain.

The EU's output as a whole is greater than the U.S. It is also a major source of sales for the world's leading companies. Forty percent of McDonald's global revenue comes from Europe - more than it generates in the U.S. General Motors, meanwhile, sold 1.7 million vehicles in Europe last year, a fifth of its worldwide sales.

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Wednesday's Sports in Brief

NEW ORLEANS (AP) -- Kobe Bryant scored 29 points, making him the fifth player in NBA history to score 30,000, and the Los Angeles Lakers snapped a two-game skid with a 103-87 victory over the New Orleans Hornets on Wednesday night. Bryant entered the game needing 13 points to eclipse the scoring milestone and did so with a short jumper late in the first half that was perhaps the least spectacular of his baskets, which included the usual array of soaring dunks, demoralizing transition 3-pointers and turnaround, off-balance jumpers. The only other players to score more than 30,000 are Kareem Abdul-Jabbar, Karl Malone, Michael Jordan and Wilt Chamberlain. ''It's pretty awesome,'' Bryant said. ''These are players I respect tremendously and obviously grew up idolizing and watching and learned a great deal from.'' The 34-year-old Bryant is younger than the other four were when they hit the mark, but Bryant also turned pro at 18, and is in his 17th season. NEW ORLEANS (AP) - NBA Commissioner David Stern said Wednesday his $250,000 fine of the San Antonio Spurs was justified because the club went beyond what league owners agreed was a reasonable approach to resting healthy players. Stern said coaches should have the authority to rest players at the end of the season, but that teams should not rest four starters little more than a month into it, and the team made matters worse by not notifying the league beforehand. PRO HOCKEY NEW YORK (AP) - NHL labor talks that began Wednesday afternoon stretched to early Thursday morning and representatives for the league and the players both said the long talks were ''candid'' and offered some sense of hope by announcing negotiations would resume later Thursday. ''We had good, candid dialogue,'' NHL deputy commissioner Bill Daly said early Thursday after nearly nine hours of talks at a Manhattan hotel. ''There continue to be some critical open issues between the two parties, and we understand the union should be getting back to us (Thursday) on some of those issues.'' Very little information leaked out of the meeting room, but it is believed that each side submitted proposals to the other and spent lots of time apart discussing what was offered. One point of contention is the length of the new contract, with owners looking for a 10-year pact, and players wanting a shorter term. The players' association is expected to have internal discussions Thursday morning before meeting with the NHL later in the day. BASEBALL NASHVILLE, Tenn. (AP) - The Los Angeles Angels added starter Joe Blanton and reliever Sean Burnett to their retooled pitching staff. Jeff Keppinger found a new home, as did Eric Chavez. The big deals, however, remained on deck at baseball's winter meetings. Jason Bay, Randy Choate, Nate Schierholtz and a diamond full of players wound up in different places Wednesday, while top contenders waited for a pair of free-agent prizes to make their decisions. The lone trade was minor, with Detroit sending left-hander Andy Oliver to Pittsburgh for a young catcher. Former MVP Josh Hamilton and former Cy Young Award winner Zack Greinke remained in play. They're the driving forces in this market and depending on where they go more moves are likely to follow. Texas would like to re-sign Hamilton, at the right price. New York Mets pitcher R.A. Dickey also keeps drawing attention. He lives near the Opryland Hotel and dropped in for a visit, though there's no change in his situation. Signed for next season, he wants a new contract, while several clubs, including Boston, want to trade for the reigning NL Cy Young winner. PRO FOOTBALL KANSAS CITY, Mo. (AP) - The mother of Jovan Belcher says her love for her son and his girlfriend has not diminished since the Kansas City Chiefs linebacker killed the 22-year-old Kasandra Perkins and then shot himself in the head at the Chiefs' complex. Cheryl Shepherd had been living her son and Perkins to help care for their 3-month-old daughter, Zoey, and was at the couple's home Saturday morning when Perkins was shot. ''That's my son, and I love him,'' Shepherd said in a brief telephone conversation Wednesday. ''She's my daughter-in-law, just like my daughter.'' Also on Wednesday, the Chiefs attended a memorial service for Belcher. Retired Chiefs Hall of Famer Bobby Bell said general manager Scott Pioli and an uncle of Belcher's spoke during the service. Shepherd, 54, was not happy about the release of recordings of the emergency phone call she made Saturday after Perkins was shot. ''I just got a phone call that they did that, and I don't appreciate it,'' she said. ''Right now I don't want to talk about it.'' In the emergency call, Shepherd begs Perkins to ''stay with me'' while frantically asking for an ambulance. She tells the dispatcher that Perkins is ''still breathing but please hurry. ... They were arguing, please hurry.'' Shepherd also told dispatchers that Perkins was bleeding, ''just barely'' awake and that it looked as though she was wounded in the back. She said Perkins moved when she spoke to her. Under the NFL's collective bargaining agreement, the estate or guardian of the couple's daughter will receive more than $1 million. FLORHAM PARK, N.J. (AP) - Rex Ryan is sticking with Mark Sanchez as the New York Jets' starting quarterback. The coach announced that Sanchez, benched Sunday against Arizona, will get the start this week over Greg McElroy and Tim Tebow when the Jets play the Jaguars at Jacksonville. ''I have to get this decision right,'' Ryan said, ''and I believe I have.'' PITTSBURGH (AP) - Pittsburgh Steelers quarterback Ben Roethlisberger returned to practice and appeared on track to return this weekend against San Diego. Roethlisberger hasn't played since spraining his right shoulder and dislocating a rib in a 16-13 overtime victory over Kansas City on Nov. 12. He was limited in practice but coach Mike Tomlin was encouraged by Roethlisberger's performance. EDEN PRAIRIE, Minn. (AP) - The Minnesota Vikings placed ailing wide receiver Percy Harvin on injured reserve, abruptly ending a season that began so well for one of the NFL's most versatile players. Coach Leslie Frazier answered questions about Harvin's status cryptically and vaguely at his regular news conference, when he ruled Harvin out of practice again because of the severely sprained ankle that has kept him out of the last three games. Then about six hours later, the Vikings announced the move that declared their top pass-catcher done for the year. COLLEGE FOOTBALL HOUSTON (AP) - Notre Dame linebacker Manti Te'o won the Lombardi Award as college football's best lineman or linebacker. Te'o, also a Heisman Trophy finalist, had 103 tackles and seven interceptions this year to help the undefeated Fighting Irish reach the BCS championship game against Alabama. BERKELEY, Calif. (AP) - California hired Louisiana Tech coach Sonny Dykes in hopes that the offensive mastermind can revive a program that struggled in recent years under the fired Jeff Tedford. WEST LAFAYETTE, Ind. (AP) - Purdue hired Darrell Hazell as its new football coach. Hazell won this season's Mid-American Conference coach of the year award after leading Kent State to its first winning season since 2001, first bowl appearance in more than four decades and the brink of a BCS bowl game. FAYETTEVILLE, Ark. (AP) - Former Wisconsin coach Bret Bielema says he won't coach the Badgers in the Rose Bowl after taking the job at Arkansas. He believes former coach and Wisconsin athletic director Barry Alvarez will be on the sideline when Wisconsin plays Stanford on Jan. 1. MIAMI (AP) - Florida International fired football coach Mario Cristobal after six seasons. Athletic director Pete Garcia made the announcement, calling FIU's season ''a total collapse'' and saying the program needs to go in a different direction. SOCCER LONDON (AP) - Lionel Messi was taken off the field on a cart because of bone bruise to his left knee in Barcelona's 0-0 tie with Benfica in a Champions League game, while defending champion Chelsea failed to advance to the final 16 in the tournament. With Barcelona already assured of advancing to the second round, Messi entered as a reserve in the 58th minute. Messi's left knee collided with the right hand of Benfica's Artur as the Argentine star ran onto Gerard Pique's long pass and tried to round the goalkeeper in the 85th minute. Messi took a left-footed shot from an angle, then fell to the field in pain. He rolled onto his back and held the knee, then was loaded onto a cart. ''It's a bruise, which doctors have been having a look at,'' Barcelona coach Tito Vilanova said. ''We now have to wait for the results of tests, but the feeling is that it isn't more serious than a knock.'' Barcelona later tweeted that tests confirmed Messi has a bruised bone on the outside of his left knee. OLYMPICS LAUSANNE, Switzerland (AP) - Eight years after winning Olympic medals in Athens, four track and field athletes from eastern Europe were ordered to hand them back because of positive doping tests. Lance Armstrong, meanwhile, can hold onto his bronze medal from the 2000 Sydney Games for a little while longer. The International Olympic Committee executive board disqualified four athletes whose Athens doping samples were retested earlier this year and came back positive for steroids, including shot put gold medalist Yuriy Bilonog of Ukraine. Also stripped were hammer throw silver medalist Ivan Tskikhan of Belarus and two bronze medalists - women's shot putter Svetlana Krivelyova of Russia and discus thrower Irina Yatchenko of Belarus. The case of a fifth bronze medalist, weightlifter Oleg Perepechenov of Russia, remains pending. The IOC said it will ask the International Association of Athletics Federations to get the four medals back and readjust the results and rankings from the Athens Games. Until then, no decision will be taken on reallocating the medals. Adam Nelson of the United States finished second in the shot put and would stand to move up to gold. GOLF DUBAI, United Arab Emirates (AP) - American defending champion Lexi Thompson opened with a 3-under 69 at the Dubai Ladies Masters, three shots off the leaders. Shanshan Feng and Florentyna Parker both shot 66s after the first round. AUTO RACING INDIANAPOLIS (AP) - Tony Stewart passed up a chance to race for Roger Penske in the Indianapolis 500. The three-time NASCAR champion said at the International Motorsports Industry Show that he wouldn't attempt to race in both the Indy 500 and NASCAR's Coca-Cola 600 on the same day. ''As much as I would like to do it, we just don't have the time to do it proper,'' Stewart said. ''The IRL is so competitive now, you're not going to just show up like drivers used to do in the past and be competitive.''

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Juan Manuel Marquez's newfound muscle raises questions about PED use

LAS VEGAS – Juan Manuel Marquez said he's "ready to go to war" with Manny Pacquiao, but the presence of an admitted steroids distributor in his corner Saturday night and a vastly more muscular body has skeptics questioning whether it's conventional warfare or chemical warfare he will use. Marquez will meet Pacquiao for a fourth, and likely final, time on Saturday at the MGM Grand Garden in a 12-round welterweight bout on HBO Pay-Per-View. Though he believes he won each of their first three fights, Marquez is winless, losing the last two after getting a draw in the first. Juan Manuel Marquez listens to comments during a news conference. (AP) Three years ago, when Marquez was 36, he moved up from lightweight to welterweight to fight Floyd Mayweather Jr. Marquez looked puny next to Mayweather and had no muscle definition. It was hardly a surprise, though, since Marquez had never weighed more than 135 in a fight and weighed less than 130 in 50 of his 55 fights to that point. Now, Marquez's physique has undergone a transformation every bit as dramatic as the one baseball star Barry Bonds did in the second half of his legendary career. He has big, bulging biceps, thick shoulders and a wide, broad chest. He accomplished this after he turned 38 and only after he hired Angel Guillermo "Memo" Heredia as his strength and conditioning coach. Marquez vehemently denies the use of any performance-enhancing drugs, which puts him in an awkward situation. If he dominates or knocks out Pacquiao, he likely won't receive the acclaim and the respect he seeks because so many would believe it to be a tainted victory. He said he's willing to submit to testing to prove his claims. "Right now, I'm willing to do it," Marquez said. "This is [a result of] hard work." [Related: Manny Pacquiao on pace for insane payday] The veteran first used Heredia, who avoided prosecution in the BALCO case by testifying for the government against track coach Trevor Graham, prior to his third fight with Pacquiao. While Marquez was bigger in that fight than he was when he met Mayweather in 2009, he was nowhere near as big or defined as he is now. Marquez gleefully explained the transformation in his body as if he'd discovered the Fountain of Youth. "In working with Angel, I've changed everything," Marquez said. "I feel great. I feel great because I've had a 20-year career and I did it the same way for 18 years. But now, Angel has changed everything." He's bigger and stronger than he had been, Marquez admitted, but he's retained his speed and quickness. If there is a way to finally get over the hump and defeat Pacquiao, he needed to become more of a threat as a puncher without sacrificing speed. It appears that Marquez has done that. The unanswered question is by what methods and at what cost. Heredia was a key witness against Graham during the Bay Area Laboratory Co-Operative scandal. Heredia admitted providing Graham's athletes, including Marion Jones, Tim Montgomery and Justin Gatlin, with steroids, EPO and human growth hormone. Heredia, who also goes by the name Angel Hernandez, doesn't hide his past, but insists he's clean now. He said Marquez's stunning physical transformation is the result of hard work and training methods he said are proprietary. "They're my secrets and I don't intend to tell so other trainers can copycat my secrets," Heredia said. Manny Pacquiao arrives at a press conference in Las Vegas. (AP) Heredia told Yahoo! Sports he was working with the government to develop drug-testing protocols for professional boxing. He said there are vast differences in three-round amateur bouts and 12-round professional fights. However, that is unlikely since the World Anti-Doping Agency testing protocol is the same in every sport. It is no different for marathoners than it is for sprinters, so it would seem extremely unlikely a new testing regimen would be needed for boxers based upon the length of their matches. Long-time boxing trainers were stunned to see Marquez squatting extraordinarily heavy amounts of weight. Pacquiao trainer Freddie Roach has publicly questioned the transformation of Marquez's body, leading Heredia to threaten a lawsuit against Roach. Heredia said he is working with nine other boxers, but he refused to name them. All of them, he said, are working the same routine as Marquez. [Related: Manny Pacquiao's success tied to trainer, confidant Freddie Roach] Testing Marquez so close to the fight would basically be useless. If he used any of a variety of substances, it likely would have long since cleared the body and be undetectable at this stage. As the United States Anti-Doping Agency's lengthy investigation of cyclist Lance Armstrong showed, Armstrong and his teammates used EPO for years without testing positive. EPO is a hormone which increases the oxygen-carrying ability of the blood. It helps the muscles perform better and over a more lengthy period of time. If injected directly into a vein, EPO will clear one's system in fewer than 24 hours. An athlete who took EPO in the evening would have no fear of testing positive the following day. According to WADA protocols, athletes have to provide a one-hour window to be available for testing. Since EPO passes the system so quickly, those using it can simply take it after the one-hour window has passed. Dr. Larry Bowers, USADA's chief science officer, said in an affidavit in the Armstrong case that the lack of a positive test is not proof that one did not dope. Victor Conte, the founder of BALCO, went to prison for his role in that scandal. Since his release, he's acted as an anti-doping advocate, the black hat turned white fighting for clean sport. "I see in interviews that Memo is trying to say he is an anti-doping advocate like me now, but we are as different as night and day," Conte told Yahoo! Sports. "What happened was, I chose not to cooperate with law enforcement. I chose to accept the full consequences. I didn't testify. I didn't provide any documents or information because these were people that I gave the drugs to. I was the leader as he was the leader. "So you're going to turn on them, you're going to testify against them, you're going to put them in prison while you walk free when you were at the top of the food chain and you were the leader of the pack? I didn't feel good about doing that. … I said, 'I'm wrong and I deserve consequences, whatever those are.' " [Related: Manny Pacquiao and Juan Manuel Marquez have little to hide in rematch] While Conte said it is theoretically possible that Marquez was able to transform his body the way he has at such an advanced age for an athlete, he remains suspicious of it. He pointed out the massive amount of weight that Marquez was shown squatting during HBO's "24/7: Pacquiao-Marquez." Several boxing trainers and conditioning coaches have told Yahoo! Sports that it is highly unusual for boxers to squat such heavy weight. Manny Pacquiao and Juan Manuel Marquez pose for photos. (AP) Conte said there is a reason for that. "That makes your entire body strong, not just your legs," Conte said of the squats Marquez has been doing. "If you want to stimulate speed, power and strength, you do it using heavy weight and exploding from under that weight with enough on your shoulders in the squat rack. "But how many boxers do you know who are in the weight room squatting huge poundage? You don't see that. That in and of itself would make you stiff and sore and unable to walk for two or three days unless you are using testosterone or other steroids to accelerate the healing, where instead of it taking three days to recover from that type of workout, you'd recover in one day." Heredia dismisses Conte, whom he describes as "that guy in San Francisco with a big mouth on Twitter," as out of touch and jealous. Heredia said he's working closely with USADA and said he remains a witness in ongoing investigations. Heredia said he is going to meet with FDA special agent Jeff Novitzky, the man who broke the BALCO case, Thursday in Las Vegas and that Marquez will provide a blood and urine sample. Heredia portrayed it as evidence that he is cooperating and attempting to develop a program that could catch cheats in professional boxing. But Novitzky is a criminal investigator, not a man who would be setting testing protocols or even handling a blood or urine specimen. Marquez swears he has never taken performance-enhancing drugs. Throughout his 20-year career, Marquez has been honorable and forthright and there's never been a hint of controversy surrounding him. Until now. Marquez insists he's not worried about the skeptics. "First of all I would like to tell you that I have never done this type of work before," he said of the training he's done with Heredia. "That's why my body has changed. I have been working very hard, specifically to get more strength. Angel is a professional and knows how much weight I am putting on. I am getting more speed and getting stronger at the same time. "As far as people thinking I am taking steroids? I would take the test. Let them take my blood. I don't care. [I would do it] just to shut everybody up. Of course my fight tests have always been clean. I don't know how those rumors get started." The rumors got started because of his association with a known steroids distributor and the subsequent dramatic transformation of his body. He may finally get that coveted victory of Pacquiao, but in this case a win may create more questions than answers.

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Australian Rogers joins Saxo-Tinkoff

PARIS (Reuters) - Three-times world time-trial champion Michael Rogers has signed a two-year contract with Saxo-Tinkoff, the Dutch team said on Friday. The 32-year-old Australian left Team Sky after two years with the British outfit, with whom he played a key part in Bradley Wiggins's Tour de France victory in July. Rogers is set to play the same support role for Spain's Alberto Contador, who will seek a third Tour de France win next year. "I think Michael's record pretty much speaks for itself. He is without a doubt a world class rider, a very strong time trialist, who is also capable of climbing, and on top of that he is a great guy," Saxo-Tinkoff team manager Bjarne Riis said in a statement. Rogers won three consecutive time-trial world titles from 2003 to 2005.

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Armstrong has three weeks to appeal UCI sanctions

PARIS (Reuters) - Lance Armstrong has been notified by the UCI that he has been stripped of all the titles he won after July 1998 and the American has three weeks to appeal, a spokesman for cycling's world governing body said on Monday. "Lance Armstrong's lawyer was notified on 6th December that all his results since 1st August 1998 were nullified. He has 21 days to appeal (from that date)," the International Cycling Union's Enrico Carpani told Reuters. The 41-year-old Armstrong had his seven Tour de France victories scratched from the records and was banned from cycling for life in October after the UCI ratified the United States Anti-Doping Agency's (USADA) sanctions against him. USADA published a report that said the now-retired rider had been involved in the "most sophisticated, professionalized and successful doping program that sport has ever seen." The International Olympic Committee (IOC) said this month it would wait for the UCI to notify Armstrong that his titles were being taken away and give him the right to appeal before stripping him of his 2000 Sydney Olympics bronze medal. "The IOC today will not move because we need to have the situation whereby the UCI notifies officially Mr Armstrong of the fact that he will be disqualified and declared ineligible and that he should hand over his medal," IOC President Jacques Rogge told reporters on December 5. "When he will be notified Mr Armstrong will have 21 days to launch an appeal. It is only after that period that the IOC can legally take action." Armstrong, who won the medal in the individual time trial, has repeatedly denied doping and never tested positive for drugs. His accusers, however, said Armstrong - one of the world's most famous athletes who is also well known for his cancer-fighting charity work - was not only a willing participant, but the ringleader, ordering team mates to cheat. In addition to financial payments, emails and laboratory test results that the agency said proved the use of performance- enhancing drugs by Armstrong and the U.S. Postal Service team, 26 people gave sworn testimony, including 11 former team mates.

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Angry Katusha hit out at UCI over World Tour omission

(Reuters) - Katusha, the team that world number one Joaquim Rodriguez of Spain rides for, have hit out at the International Cycling Union (UCI) for dropping them from the sport's top flight. On Monday, the UCI announced Katusha's application for World Tour status in 2013 had been rejected but gave no explanation as to why the Russian team ranked second in this year's standings were not granted an automatic spot for next season's leading races. "At the present moment Katusha has no information regarding the reasons for the decision of the UCI," the team said in a statement on Tuesday. "Team management, riders and staff are extremely surprised by the lack of justification for such a decision." The UCI told Reuters the move was made by the independent licence commission which makes its decisions on sporting, ethical, administrative and financial grounds. "The UCI violates the canons of sports ethics and causes irreparable moral and psychological harm to the athletes before the start of the new season," added Katusha. The decision by the UCI means the Russian team will need invitations to take part in the Tour de France, the Giro d'Italia, the Tour of Spain and several top one-day and one-week races in 2013.

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