Tax Break

Essential reading: Romney campaign and GOP at odds on healthcare tax, and more

July 3, 2012

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

* Romney campaign and GOP at odds on healthcare tax. Michael Shear – The New York Times. Mitt Romney’s presidential campaign threw cold water on a central Republican attack line on Monday, saying that President Obama’s healthcare mandate should be thought of as a penalty and not a tax. That message, delivered first by a top aide to Mr. Romney on television and later by the campaign, contradicts top Republican Party officials and leaders in Congress, who have spent the last several days eagerly accusing the president of levying a new tax. Link

* IRS may botch complaints of tax-exempt abuse-watchdog. Patrick Temple-West – Reuters. The Internal Revenue Service is missing opportunities to catch possible abuse by tax-exempt groups, the agency’s watchdog said on Monday amid concern that some groups are spending heavily on the political campaign for the November 6 elections. Allegations of abuse may be mishandled or lost, said the report by the Treasury Inspector General for Tax Administration. Lax IRS enforcement may cost the government millions of dollars in uncollected taxes, the report said. Link

* Christie’s call for tax cut is unheeded. Heather Haddon – The Wall Street Journal. Gov. Chris Christie forced lawmakers back to the statehouse Monday and made another pitch for a tax cut, a significant piece of his agenda that Democrats took a firm stand against. Christie, a Republican, convened the special session of the Legislature just three days after signing a $32 billion budget and helping shepherd passage of a landmark overhaul of the teacher tenure system. Link

* For Philippines leader, it’s war on graft, tax evasion. Rosemarie Francisco and Stuart Grudgings – Reuters. A middle-class woman is headed to jail for tax evasion. That wouldn’t make headlines in many countries, but it’s big news in the Philippines. It was enough to send President Benigno Aquino reaching excitedly for his phone during an interview this week to retrieve a message about the case from his tax chief. Businesswoman Gloria Kintanar had just exhausted her appeals and would become the first tax evader in Philippine history to be jailed – once authorities deal with her claim of illness at the hospital where she is under arrest. Link

* Roll-your-own shops may have to close. Mike Esterl – The Wall Street Journal. Hundreds of small tobacco shops that let smokers roll their own cigarettes soon could be out of business under federal legislation classifying them as manufacturers, subjecting them to the same taxes and regulations as the broader industry. Such stores have spread rapidly over the past few years by capitalizing on technology and loopholes that let them offer cigarettes often at half the price of ready-made brands. Link

* A vast new taxing power. The Wall Street Journal editorial. The commentary on John Roberts’s solo walk into the Affordable Care Act wilderness is converging on a common theme: The chief justice is a genius. All of a sudden he is a chessmaster, a statesman, a Burkean minimalist, a battle-loser but war-winner, a Daniel Webster for our times. Now that we’ve had more time to take in Chief Justice Roberts’s reasoning, we have a better summary: politician. In fact, his 5-4 ruling validating the constitutional arguments against purchase mandates and 5-4 ruling endorsing them as taxes is far more dangerous, and far more political, even than it first appeared last week. Link

* Healthcare and our silly aversion to taxes. Stephen Stromberg – The Washington Post opinion. The semantic dispute over the definition of a tax or penalty is idiotic. Though there are political and, as Chief Justice John Roberts demonstrated, legal consequences to the wording, the policy is basically the same either way. Americans who refuse to purchase health insurance will still owe the government money that Congress has empowered the Internal Revenue Service to collect. Practically speaking, it doesn’t matter if you call that a penalty, a tax or a robot vacuum cleaner. Link

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