Tax Break

Essential reading: Boehner sticks to no tax-hike pledge, and more

June 1, 2012

Speaker of the House John Boehner on Capitol Hill in Washington. REUTERS/Larry Downing

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

* Boehner holds firm on no tax-hike pledge. David Lawder – Reuters. U.S. House of Representatives Speaker John Boehner on Thursday dismissed suggestions that Republicans were warming to raising revenue as part of a plan to cut the deficit, adding that tax hikes on millionaires would cost jobs. The top Republican in Congress blasted a proposal from House Democratic leader Nancy Pelosi to raise taxes only on those earning more than $1 million, saying it would hurt too many small business owners, who hire the most U.S. workers. Link

* US House panel backs medical device tax repeal. Patrick Temple-West – Reuters. A Republican-controlled congressional panel voted on Thursday to repeal a tax on medical devices, a key revenue provision in President Barack Obama’s 2010 healthcare reform law, but the measure was not expected to become law. Approval in the House, which is dominated by Republicans, was viewed as probable, possibly as soon as next week. But the measure faced an uphill climb in the Democrat-controlled Senate, where parallel legislation lacks bipartisan sponsors. Link

* On sidelines of tax-writing panel, estate-tax policy is debated. Siobhan Hughes – The Wall Street Journal. A debate over estate-tax policy is being waged on the sidelines of Congress, where policy isn’t developed but where Republican lawmakers are  eager to draw battle lines over the year-end expiration of the Bush tax cuts. On a day when a House tax-writing panel was voting to dismantle portions of the 2010 healthcare law, Rep. Joe Walsh on Thursday used his perch as chairman of a House Small Business Committee subcommittee to shine a spotlight on the estate tax. The freshman Republican stepped into an area in the jurisdiction of the U.S. House Ways and Means Committee in order to call attention to the dilemma of certain small-business executives who face the prospect that their businesses will have to be sold or dismantled if tax policy reverts to 2001 levels in order for heirs to come up with the money to pay the estate tax. Link

* Did light touch tax become soft touch? Vanessa Houlder – The Financial Times. To critics, the UK’s former head tax collector Dave Hartnett is the most wined-and-dined civil servant in Whitehall whose alleged sweetheart deals with big business cost Britain billions of pounds of tax. Hartnett’s role in encouraging “far too cozy a relationship between HMRC and large companies” was cited in a scathing report by parliament in December. Though HMRC, the UK customs and tax department, slammed the report as inaccurate, Margaret Hodge, the MP who led the investigation, hailed it as a “damning indictment”. Link

* Cities lose property tax, state aid: report. Hilary Russ – Reuters. For the first time since 1980, property tax revenue and state aid to cities across the United States are shrinking simultaneously, the Pew Charitable Trusts said in a report on Thursday. The downward double spiral is likely to continue for at least two to three years at a time when local governments already have been squeezed by increasing costs and falling revenue, Pew researchers said. Link

* Ad blitz ahead of California vote on cigarette tax. Vauhini Vara – The Wall Street Journal. A proposal to raise California’s cigarette tax by $1 a pack is emerging as the highest-profile ballot item in Tuesday’s primary election amid a barrage of ads on both sides. Known as Proposition 29, the measure would boost California’s cigarette tax to $1.87 a pack from 87 cents. If passed, the measure would raise more than $700 million annually, which would go to fund research into cancer and other tobacco-related diseases, along with prevention and education programs. Link

* Amazon to build New Jersey warehouses and collect state tax. N.R. Kleinfield – The New York Times. Amazon plans to build two large distribution centers in New Jersey and will start collecting state sales tax next summer from its customers in the state, Gov. Chris Christie announced. Under an agreement with the state, Amazon, which is based in Seattle, will start collecting the state’s 7 percent sales tax on orders from New Jersey residents by July 1, 2013 — unless federal legislation is passed that mandates an earlier date — thus resolving complaints from merchants based in New Jersey. Link

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