Tax Break

Essential reading:Empire State IPO tax, bankers find opportunity in tax haven crackdown

April 9, 2012
 
 
 

Welcome to the top tax and accounting headlines from Reuters and other sources.

 

 * Empire state owners go ape over IPO tax issue. Craig Karmin – The Wall Street Journal. The fight over the proposed Empire State Building public offering has moved to a new battleground: a spat between small investors and the Malkin family over taxes arising from the iconic skyscraper’s coming listing. The tax bill from the initial public offering could more than wipe out any cash many of the 2,800 investors would initially receive from the sale, according to filings with the U.S. Securities and Exchange Commission. The Malkins would be allowed to defer some of their tax and could be reimbursed about $83 million for other tax liabilities, the filings say. Link  

* Labour challenges Osborne over his tax. Jim Pickard – The Financial Times. U.K. Chancellor George Osborne has been challenged by the Labour party to clarify whether he will benefit personally from next year’s cut in the top rate of income tax despite having said last month he was “not personally affected” by the move. When the chancellor announced the cut from 50 percent to 45 percent for those earning 150,000 pounds ($237,500)– to start next April – he prompted questions about whether it would benefit any senior ministers. Link  

* Tax haven crackdown creates opportunities for bankers. Mark Scott – The New York Times. As regulators clamp down on money flows around the globe, governments, even those that prided themselves on the strength of their secrecy laws, like Switzerland, are facing pressure to share banking information and change their policies. Now, private banks and wealth managers are scrambling to convert so-called black money — assets that have not been disclosed — into accounts that are above board. The shift may provide opportunities for the industry. As more funds become legitimate, analysts say financial institutions will be able to sell extra wealth management products to affluent people and enter markets that had previously been off limits. Link  

* Germans and Swiss reach stricter deal on tax cheats – David Jolly – The New York Times. Switzerland agreed Thursday to a revised tax deal with Germany under which it would pay billions of dollars on funds hidden in its banks by German tax dodgers, the latest step in an international charm offensive that is meant to salvage at least some of the country’s famous banking secrecy. The accord, made tougher after a September deal was criticized by the German opposition and officials in Brussels, provides for assessment of a one-time charge of 21 percent to 41 percent of the value of secret German accounts, higher than the original agreement of 19 percent to 34 percent. Swiss banks that are home to such accounts would make payments to the German government. Link  

* Gramm and McMillin: The real causes of income inequality. Phil Gramm and Steve McMillin – The Wall Street Journal opinion. While income distribution has become a source of protest and political debate, any analysis of taxes paid in high tax-and-spend countries shows that the U.S. has the most progressive income tax system in the world. An inconvenient truth for the advocates of higher taxes on America’s rich is that big governments in developed countries are funded not by taxing the rich more than the U.S. does, but by taxing everybody else more. If the share of income coming from businesses, capital gains and dividends had remained at the levels before the tax rate changes of 1986, 1997 and 2003 respectively, the income of top 1 percent filers would have been 31 percent lower in 2007. Link  

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