Tax Break

Essential Reading: Deductions Romney would target, Buffett Rule politics, more

April 16, 2012

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

* Romney specifies deductions he would cut. Sara Murray – The Wall Street Journal. In order to offset the 20 percent income tax cut he has proposed for all taxpayers, Romney would eliminate or limit for high-earners the mortgage interest deduction for second homes, and likely would do the same for the state income tax deduction and state property tax deduction. He also said he would look to the Department of Education and the Department of Housing and Urban Development for budget cuts. Link

* Q+A: The ‘Buffett Rule,’ a minimum tax on the rich. Kim Dixon and Patrick Temple-West – Reuters. President Barack Obama and congressional Democrats are laying a political trap for Republicans to be sprung on Monday when the U. S. Senate is slated to vote on the proposed “Buffett Rule,” which would slap a minimum tax on the highest-income Americans. Link

* For Americans abroad, taxes just got more complicated. David Jolly – The New York Times. Americans overseas face a new form that will add to the hassle of tax time for many and, critics say, set up the unwary for penalties. The new requirement comes courtesy of the Foreign Account Tax Compliance Act, or FATCA, an effort to crack down on offshore tax evasion by U.S. citizens. Link

* New rules will decimate profits. Steve Johnson – The Financial Times. A tightening of the International Accounting Standards Board’s IAS 19 directive from 2013 will stop companies from padding their earnings statements with anticipated pension fund returns that may never materialize and slash hundreds of millions of euros from the profits of many European companies next year. Link

* Barclays’ tax deals face US scrutiny. Megan Murphy – The Financial Times. Barclays’ controversial tax planning business will come under fresh scrutiny in a U.S. Tax Court in New York today in a suit over Bank of New York Mellon’s use of a Barclays structure that cost the U.S. government more than $1bn in lost tax receipts. Link

* IRS, Bank of New York trial documents – The Financial Times. The key pre-trial documents in the case over Barclays’ Stars tax structures. Link

* Coming Soon: ‘Taxmageddon’. David Leonhardt – The New York Times Sunday Review. The end of 2012 will be unlike any other time in memory for the federal government. Poor families would see their taxes rise and with the expiration of the Bush tax cuts, total federal taxes for top-earning families would rise by tens or even hundreds of thousands of dollars a year. Spending cuts would also take effect. Economists are frightened of what such a sharp shift might do to a still fragile economy. Link

* Tax Day sets stage for long political fight that will dominate White House race and Congress. The Washington Post Opinion. Democrats think the Buffett rule vote this week will underscore their commitment to economic fairness and GOP favoritism for the rich, a prominent election theme. Republicans believe the business tax measure also up for a vote will spotlight their efforts to lower taxes and create jobs, contrasted with Democrats’ preference for higher taxes to finance ever-larger government. Link

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