Essential reading: Treasury says firm with ties to President discussed tax break, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* Treasury says firm discussed tax break. Eric Lichtblau and Eric Lipton – The New York Times. The Treasury Department said Thursday that a communications firm with close ties to President Obama talked to the administration about allowing tax breaks for its corporate clients on more than $1 trillion in offshore revenues. The firm, SKDKnickerbocker, has insisted that it never spoke with senior Treasury Department officials about the offshore tax issue and that it does not lobby policy makers on issues affecting its corporate clients. Link
* Election proving a cliff-hanger for the dollar. Nicholas Hastings – The Wall Street Journal. The currency market’s focus on the election will be even more intense as it comes as the economy continues to struggle out of recession, after a couple of previous false starts, and as a way to prevent the reversal of previous tax cuts due to take place on January 2, 2013 – the so-called fiscal cliff – has yet to be found. Link
* California colleges’ funding hangs on a ballot measure. Jim Carlton – The Wall Street Journal. California’s Proposition 30, championed by Gov. Jerry Brown, would raise $6 billion in taxes to spare state schools from budget cuts in this fiscal year. Brown and the Democrat-run state legislature put a trigger in this year’s state budget that will cut about $5 billion from public schools and universities if voters reject the measure. Link
* Proposition 38 tries to turn a tax liability into an asset. John Healey – The Los Angeles Times. Proposition 38 would raise state income taxes on a sliding scale for 12 years, generating roughly $10 billion a year. The biggest problem for 38, politically, is that its income-tax increase would hit Californians with as little as $7,500 in taxable earnings. Link to
* Stark tax choice for Californian voters. Matthew Garrahan – The Financial Times. Jerry Brown, California’s governor, has warned that the wealthiest US state will have to close schools for up to an extra three weeks if voters do not back temporary tax increases on the rich. A ballot in next month’s US election will ask Californians to support a tax rise of 3 percent on the wealthiest 1 percent in the state. Link
Calendar
Some important tax and accounting events in the week ahead:
Monday, Oct. 29
U.S. Public Company Accounting Oversight Board member Lewis H. Ferguson speaks to the annual meeting of the National Association of State Boards of Accountancy. 11:15 a.m. EDT, Walt Disney World Swan hotel. Orlando, Florida.
Essential reading: CEOs call for deficit action, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* CEOs call for deficit action. David Wessel – The Wall Street Journal. Chief executives of more than 80 big-name U.S. corporations, from Aetna Inc. to Weyerhaeuser Co., are banding together to pressure Congress to reduce the federal deficit with tax-revenue increases as well as spending cuts. The CEOs who signed the manifesto deem tax increases inevitable no matter which party succeeds at the polls in November. Link
* Tax Policy Center in spotlight for its Romney study. Annie Lowrey – The New York Times. A small nonpartisan research center operated by professed “geeks” has found itself at the center of a rancorous $5 trillion debate between President Obama and Mitt Romney. No paper put out during the presidential campaign has proved more controversial than an August study by the Washington-based Tax Policy Center, a respected nonprofit that issues studiously detailed tax analyses. Link
Essential reading: For some of the wealthy, a 0 percent tax on capital gains, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* For some of the wealthy, a 0 percent tax on capital gains. Arden Dale – The Wall Street Journal. Financial advisers are helping a surprising group take advantage of a 0 percent capital-gains rate set to rise to 10 percent next year: affluent retirees, business owners and even some wealthy philanthropists. The rate only applies to those in the bottom two tax brackets, a group not usually associated with the wealthy. Link
* Starbucks finance chief denies tax claims. Louise Lucas and Vanessa Houlder – The Financial Times. Starbucks has admitted a quarter of its 600 UK-owned stores are running at a loss, in a rebuttal of accusations of tax avoidance, blaming its low corporate tax payments on overexpansion. In an interview with the Financial Times, Troy Alstead, chief financial officer of the global coffee chain, said: “I look forward to the day when we pay a lot more tax.” Link
Essential reading: Checking tax facts from the presidential debate, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* Fact check: The ‘territorial tax.’ Josh Hicks – The Washington Post. The president said on Monday that Mitt Romney wants to provide more tax breaks for companies that move overseas. He was referring to Romney’s proposal to enact a “territorial tax” system that would allow U.S.-based companies to bring foreign-earned profits back home without paying U.S. taxes. Link
* Congressman Chris Van Hollen wants to consider another payroll tax holiday. Suzy Khimm – The Washington Post. Neither party seems particularly keen on extending the payroll tax cut for another year. But its defenders are slowly beginning to emerge on the left. Link
Essential reading: Democrats threaten payroll tax cut consensus, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* Democrats threaten payroll tax cut consensus. James Politi – The Financial Times. Some Democrats in Congress are seeking to include an extension of the $120 billion payroll tax cut in negotiations over the looming “fiscal cliff”, shaking what had appeared to be a bipartisan consensus to allow the measure to expire as planned at the end of the year. The move could complicate the budget talks due to begin after the November presidential election and alarm rating agencies. Link
* How Romney tackled tax changes. Damian Paletta – The Wall Street Journal. As governor of Massachusetts, Mitt Romney pushed changes in the state’s corporate tax code that raised hundreds of millions of dollars, particularly from banks, to help close an annual budget gap of more than $1 billion. Now, as a presidential candidate, Romney is promising an overhaul for the federal tax code. Link
Calendar
Some important tax and accounting events in the week ahead:
Monday, Oct. 22 • Tax Policy Center roundtable discussion of the fiscal cliff and federal budget politics includes Alice Rivlin, former director of the Office of Management and Budget, and former vice-chair of the Federal Reserve. 9 a.m. – 10:30 a.m. EDT, Urban Institute. Washington.
Monday, Oct. 22 – Thursday, Oct. 25 • Federation of Tax Administrators conference on tax expenditures, incentives and the long-term fiscal sustainability of state and local governments, among other topics. Providence, Rhode Island.
Essential reading: Missouri political donor thrives with no limits, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* Missouri political donor thrives with no limits. Nicholas Confessore – The New York Times. Since 2008, when Missouri abolished contribution limits, donor Rex Sinquefield has donated more than $20 million to local candidates and political action committees. More than half of that money has gone to advance his signature cause: eliminating state and local income taxes in Missouri, a major source of government revenue, and replacing them with sales taxes. Link
* JPMorgan: If the payroll tax cut falls, so does growth. Suzy Khimm – The Washington Post. JPMorgan no longer thinks the payroll tax holiday will survive the fiscal cliff negotiations. It’s downgraded its GDP growth forecast for the first quarter from 1.5 percent to just 1 percent and revised its second quarter forecast from 2.25 percent to 1.5 percent. Link
Essential reading: Officials say Obama could veto a bill blocking ‘fiscal cliff’ without tax hike for rich, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* Officials: Obama ready to veto a bill blocking ‘fiscal cliff’ without tax hike for rich. Lori Montgomery – The Washington Post. President Obama is prepared to veto legislation to block year-end tax hikes and spending cuts, collectively known as the “fiscal cliff,” unless Republicans bow to his demand to raise tax rates for the wealthy, administration officials said. Freed from the political and economic constraints that have tied his hands in the past, Obama is ready to play hardball with Republicans, who have so far successfully resisted a deal to tame the debt that includes higher taxes, Obama’s allies say. Link
* Voters with questions at debate still have them. Trip Gabriel – The New York Times. Debate questioner Mary Follano, 54, a respiratory therapist with six grown children, some struggling with part-time jobs, said she agreed with President Obama on raising taxes on incomes above $250,000. But she was sympathetic when Mitt Romney said raising taxes on high earners would hurt small-business owners, who create jobs. Link
Essential reading: California unions fighting fundraising proposal rather than pushing for tax hike, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* California’s labor’s big-money focus on fundraising law may hurt chances of tax hike. Chris Megerian – The Los Angeles Times. California’s Labor unions are pooling their money to fight Proposition 32, which would eliminate their primary political fundraising tool — paycheck deductions — at the same time Gov. Jerry Brown is counting on their support for his tax-hike initiative also on the ballot next month. Link
* Why tax reform could help growth. Dylan Matthews – The Washington Post. In large measure, what you think about the tenability of Mitt Romney’s tax plan depends on what you think his tax reform proposal can do for economic growth. Optimistic growth estimates have predicted only a mild economic boost from Romney’s proposal — $53 billion of the $360 billion annual cost of the plan would be recouped from higher revenues that result from faster growth. Link
