Tax Break

Essential reading: Julius Baer bids for Merrill Lynch wealth-management, and more

June 19, 2012

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

* Julius Baer seeks Merrill Lynch unit. John Revill – The Wall Street Journal. Julius Baer Holding AG said Tuesday it is in talks to buy Bank of America Corp’s Merrill Lynch international wealth-management business, a move that would help reduce the Swiss private bank’s dependence on its home market where margins have been squeezed by a crackdown on tax havens and banking secrecy. A deal could be worth up to $2 billion, according to recent reports. Link

* On budget, Gov. Christie alters course. Heather Haddon – The Wall Street Journal. Republican Governor Chris Christie has risen to national GOP fame as a fiscal conservative who in his first budget address denounced the use of “one-time gimmicks that have worsened our situation.” But now Christie faces the reality of underperforming tax collections just as he is set on passing a substantial tax cut by the end of the month. Link

* Default concerns grip muni bond market. Nicole Bullock and Matt Garrahan – The Financial Times. Default fears have gripped a $20 billion part of the U.S. municipal bond market as the fallout from state budget cuts in California may threaten upcoming payments. The situation has left investors, mostly wealthy individuals who benefit from tax breaks on munis, with little insight as to how to evaluate these bonds. Link

* AMA set to vote on soda tax, with funds targeted to fight obesity. Mary MacVean – The Los Angeles Times. The American Medical Association is expected to weigh in on the soda conversation this week. It is slated to consider a proposal that supports soda taxes as one way to pay for programs to fight obesity and that says if soda taxes are imposed, the money should go to such programs. Link

* French Socialists eye tax rises after big poll win. Daniel Flynn and Jean-Baptiste Vey – Reuters. France’s Socialists vowed on Monday to use a resounding victory in weekend parliamentary elections to pursue President Francois Hollande’s drive for growth in Europe while sticking to promises to cut the budget deficit, mostly through tax increases. Link

* Cameron says rich French tax exiles welcome in the UK. Nicholas Winning – The Wall Street Journal. If French President Francois Hollande‘s government slaps a 75 percent income tax rate on those earning over 1 million euros ($1.26 million) a year, then Britain would be very happy to take those people in, U.K. Prime Minister David Cameron said Monday in a comment that may put some French noses out of joint. Cameron knows a thing or two about the controversial issue of taxing the rich after his government’s decision in March to lower its top rate of income tax to 45 percent from 50 percent on incomes over 150,000 pounds ($235,000) drew strong criticism from unions and the main center-left opposition party. But his view was warmly received by the audience at an event for business people on the fringes of a summit of Group of 20 leaders in Mexico Monday. Link

* As income inequality grows, some movement at the top and bottom. Bruce Bartlett – The New York Times opinion. It is indisputable that the distribution of income in the United States has become more unequal. However, many economists say they believe that turnover among both the poor and the rich substantially mitigates its impact. If everyone remained in the same income bracket year after year, the negative effects of inequality would be far worse. Link
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