Tax Break

Essential reading: Push for a fiscal pact picks up speed on Capitol Hill, and more

June 11, 2012

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

* Push for a fiscal pact picks up speed, and power. Jonathan Weisman – The New York Times. The hunt for a way to avert a crisis appears to be quickening — and, significantly. It now includes the people who might be able to make it happen. This includes Senate Finance chairman Max Baucus. On Monday, Baucus delivers a speech to the Bipartisan Policy Center in Washington on the path toward a simpler tax code that could generate more revenue. Later in the week, the Senate Finance Committee will meet on a host of tax issues. Link

* Flush state ponders a tax cut’s cost. Mark Peters – The Wall Street Journal. An energy boom has flooded North Dakota’s coffers at a time when almost every other state is struggling to make ends meet. But when its fiscally conservative residents get the chance Tuesday to vote themselves a big tax cut, they are expected to say “no.” At issue is a referendum for a proposed constitutional amendment to eliminate local property taxes, requiring the newly flush state government to make up the difference. Link

* Vodafone paid zero UK corporation tax last year. Katherine Rushton – The Telegraph. The company saw its global corporation tax bill go up by 300 million pounds ($462.53 million) to 2.3 billion pounds, but none of that money went to the exchequer in the UK, where Vodafone takes several hundred millions of pounds from more than 19 million customers each year. Although Vodafone has acted within the law, its minimal bill in Britain is likely to reignite anger over the group’s dealings with the taxman. Link 

* India to unveil tax bill in next parliament session: finance minister. Arup Roychoudhury – Reuters. India hopes to introduce a bill for a direct tax code (DTC) during the July to August session of parliament, Finance Minister Pranab Mukherjee said on Monday. The code, which will replace the existing Indian Income Tax Act 1961, intends to cut tax rates to bring more people and companies under the tax net, phase out profit-linked exemptions for companies and replace them with investment-linked incentives. Link

* Washington must agree on the rules of fiscal engagement. Dennis Hastert and Dick Gephardt – The Financial Times opinion. The two former leaders of the House of Representatives, one a Republican and the other a Democrat, say they believe comprehensive changes must occur to get the U.S. heading in the direction of a balanced budget. As part of this effort, Washington must have a thorough debate on fundamental tax reform. They say they are unaware of a single American who is satisfied with the existing tax structure. Link

* From the California dream to a cautionary tale. Edward Luce – The Financial Times opinion. There is a saying that you go to Europe to observe the past and to California to witness the future. Jerry Brown is doing what he thinks necessary to stop the Golden State from heading in a southern European direction. Californians have agreed to only three of the past 20 tax proposals. In spite of being a very health-conscious state, last week it rejected a $1 tax on a pack of cigarettes. Link

($1 = 0.6486 British pounds)

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