Tax Break

Essential reading: Greeks stop paying taxes, Nancy Pelosi’s rich tax, and more

May 24, 2012

The ancient Acropolis of Athens at sunset. REUTERS/Yannis Behrakis

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

* Pelosi pushes tax hike for those making $1 million or more. John McKinnon – The Wall Street Journal. Is House Democratic Leader Nancy Pelosi abandoning President Barack Obama in his effort to raise taxes on households making more than $250,000? It sure sounded that way on Wednesday. In a letter to House Speaker John Boehner, Pelosi called on Republicans to pass a permanent extension of Bush-era tax levels for the middle class. The only group Pelosi singled out for a tax increase was people earning $1 million or more. Link

* Nancy Pelosi risky pander on taxes. The Washington Post editorial opinion. House Minority Leader Nancy Pelosi has an interesting definition of what constitutes the middle class. She believes it includes people earning anything less than $1 million a year — at least when it comes to tax cuts. The Democratic leader’s position offers the political benefit of letting Democrats argue that the GOP opposed curtailing tax cuts even for millionaires. The risk of this particular pander, however, is that $1  million becomes the new, high bar; tax cuts below that level remain off-limits. Do Democrats really want their new slogan to be: “Almost as irresponsible as the Republicans?” Link

* UK govt to stop public sector workers avoiding income tax. Ainsley Thomson – The Wall Street Journal. The U.K. government Wednesday vowed to clamp down on public sector workers avoiding paying their fair share of tax after a review found that more than 2,400 highly paid civil servants were paid “off payroll,” allowing them to minimize their tax bill. Link

* HMRC job cuts ‘undermining’ tax crackdown. Hannah Kuckler – The Financial Times. Cutting the number of tax collectors at Revenue & Customs has lost the tax collecting agency 1.1 billion pounds ($1.73 billion) in taxes over five years, Parliament’s public spending watchdog has estimated. Link

* Euro exit worry prompts more Greeks not to pay tax. Lefteris Papadimas – Reuters. Greeks are notoriously reluctant to pay taxes, but even those that do are holding off at the moment until they are sure their country stays in the euro zone. State coffers are on track for a 10 percent fall in revenues this month as a result, a senior finance ministry official said on Wednesday. Link

* Insecurity touches the tycoons of Greece. Landon Thomas and Eleni Varvitsoti – The New York Times. The wealthy business leaders of Greece, people in the best position to help shore up the nation’s finances, are mainly keeping their heads down. Now, with the country’s top vote-getter, the leftist firebrand Alexis Tsipras, talking more and more about nationalizing companies and industries and, in the words of his top economic adviser, “taxing the rich,” there is even more incentive to lie low. Link

* Trafigura shifts trading center to Singapore. Emma Farge and Florence Tan – Reuters. Commodities trader Trafigura said on Wednesday that Singapore would become its main trading center as it seeks to tap booming regional demand, dealing a blow to Switzerland as a commodities hub. Typically trading companies in Geneva are categorized as “auxiliary companies” and pay around 12 percent corporate tax. But taxes can be even more favorable in Singapore, which allows commodity firms with qualifying income to benefit from a concessionary tax rate of 10 percent, according to a government website. The Alpine country’s reputation for secrecy and discretion has also begun to change partly due to a long-running tax dispute with the United States. Link

($1 = 0.6363 British pounds)

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