Tax Break

Essential reading: California reaches a budget deal, and more

June 22, 2012

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

* California reaches a budget deal. Jennifer Medina – The New York Times.
Gov. Jerry Brown and the Democratic-controlled legislature reached a budget deal on Thursday to close a nearly $16 billion budget gap. The agreement came after days of negotiations, with legislative leaders reluctant to make the cuts that Governor Brown said were urgently needed. Link

* U.S. no-tax pledge creator entreats Republicans. Kim Dixon and David Lawder.
The creator and enforcer of a no-tax-hike pledge Grover Norquist huddled with a small group of Republican lawmakers on Thursday in Washington to help strengthen their resolve ahead of tax battles expected to intensify in coming months. South Carolina Republican Senator Lindsey Graham and former Republican Florida Governor Jeb Bush are among prominent Republicans suggesting recently of the need for more flexibility on tax issues. Link

* As churches get political, IRS stays quiet. Nanette Byrnes – Reuters. Pastor Jim Garlow not only intends to break the rules, he also plans to spend the next four months recruiting other pastors to do the same as part of Pulpit Freedom Sunday. On that day each year since 2008, ministers intentionally try to provoke the Internal Revenue Service. The situation is fraught with peril for the IRS, which needs to be seen as apolitical. When it cracks down on political activities proscribed by the 501(c)(3) regulations, it is inevitably branded as partisan. Link

* Christie allies vote against key spending bill. Heather Haddon – The Wall Street Journal.
Members of New Jersey Gov. Chris Christie’s own party voted against a bill to help plug a budgetary hole to help pay for the administration’s tax cut—an unexpected wrinkle in an already fraught budgetary session. Two Republicans voted against the bill, which included reallocating $261 million from the Transportation Trust Fund to the general budget. Link

* IRS to review whistleblower program for speed, quality. Jessica Dye – Reuters. The Internal Revenue Service is planning a “comprehensive review” of its embattled whistleblower program to improve the speed and quality of its decisions, an agency official said in a June 20 memorandum. Link

* PM’s ‘political tin ear’ on tax attacked. Helen Warrell, Jim Pickard and Kiran Stacey – The Financial Times. David Cameron’s decision to criticizes tax avoidance by Jimmy Carr, the comedian, has prompted unease in Westminster from officials, Conservative MPs and peers who fear he showed a “political tin-ear” in singling out one person over their financial affairs. Link

* German finance min: Want to push transactions tax today with “all emphasis.” The Wall Street Journal. Germany and Austria will push for the creation of a financial transactions tax covering at least nine European countries Friday, their finance ministers said Friday. German Finance Minister Wolfgang Schaeuble told journalists he will push with “all emphasis” for a deal with at least nine states of the European Union. Link

* Japan risks delay in health, pension reforms over tax debate. Stanley White – Reuters. Japan’s breakthrough deal on sales tax increases, set to be sealed in a parliamentary vote next week, comes at a price of a delay in reforming healthcare benefits and pensions that must be tackled to curb the vast national debt. Parliament’s lower house looks certain to approve on Tuesday a plan to double the sales tax to 10 percent over three years, a first step towards restoring Japan’s fiscal health. Link

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