Tax Break

Essential reading: As governor, Romney picked winners and losers, no taxes for Lagarde, and more

May 30, 2012

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

* As governor, Romney picked winners and losers of his own. Andy Sullivan – Reuters. Massachusetts Gov. Mitt Romney’s June 2006 announcement that drugmaker Bristol-Myers Squibb was moving into his state served as a signature accomplishment. The new facility came with a price tag: Romney and other state officials agreed to $67 million in tax breaks and other inducements to ensure the New York-based company picked Massachusetts over rival states like North Carolina. Romney backed tax breaks for film makers and biotech and medical-device manufacturers. His administration promoted venture capital-style funds that extended loans to start-up companies, some of which subsequently went out of business. Link

* Christine Lagarde, scourge of tax evaders, pays no tax. Kim Willsher – The Guardian. Christine Lagarde, the IMF boss who caused international outrage after she suggested in an interview with the Guardian on Friday that beleaguered Greeks might do well to pay their taxes, pays no taxes, it has emerged. As she is an official of an international institution, her salary of $467,940 (£298,675) a year plus $83,760 additional allowance a year is not subject to any taxes. Link

* Anti-tax crusader assails report on Republican shift. Patrick Temple-West – Reuters. Anti-tax crusader Grover Norquist, scourge of any and all tax increases, said on Tuesday that a news report questioning the vitality of his “no new taxes” pledge – a vow taken by many Republican politicians – is overblown. Republicans who have not signed the pledge may be in congressional races they are unlikely to win anyway, while other candidates have rules against signing pledges, he said. Link 

* Japan PM, Ozawa still apart on tax, opposition deal beckons. Tetsushi Kajimoto – Reuters. Japanese Prime Minister Yoshihiko Noda edged closer on Wednesday to a possible deal with the opposition to push through his plan to double the sales tax, after party heavyweight Ichiro Ozawa refused to support his signature initiative. Former finance minister Noda has pledged to bring the plan to a vote in the current session of parliament that ends on June 21, and requires masterful maneuvering to get it passed. Link

* ‘Pasty tax’ u-turn signals uncertainty for UK business. Ainsley Thomson – The Wall Street Journal. Following Chancellor of the Exchequer George Osborne’s u-turn, the meat-filled pastry and parked mobile homes have come to symbolize a government that is prepared to reverse a budget measure if it proves unpopular enough. There is also a significant negative side. The u-turn risks undermining one of the central conditions the annual budget statement is meant to foster: certainty. Link

* Give me your tired, your over-taxed. Andrew Rosenthal – The New York Times. A couple of conservative news outlets reported that New York State shed 1.3 million residents on net over the last 10 years, with more than 600,000 leaving for Florida. During the same period, more than 200,000 Pennsylvanians also moved to Florida, according to the Tax Foundation. There’s no reason to think that taxes played a part in a single person’s decision to leave New York—let alone that taxes “may have” spurred “many more” departures than weather. The Tax Foundation did not commission a poll on the topic, and does not present any evidence to support that assertion. Not even anecdotal evidence. Link

* What’s right with Kansas. The Wall Street Journal editorial. France’s new president wants to impose a 75 percent tax rate, and Washington is headed for a huge tax cliff in January, but some enlightenment reigns in the American heartland. Last week Governor Sam Brownback continued the post-2010 reform trend among GOP governors by signing the biggest tax cut in Kansas history. The plan chops the state income tax rate to 4.9 percent from 6.45 percent and eliminates income taxes on about 190,000 Kansas small businesses. Brownback has made pro-growth tax reform his highest priority, and his original plan called for phasing out the income tax over a decade. That plan ran into opposition in the Senate. Link

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