Tax Break

Essential reading: Romney campaign’s missteps have some Republicans grumbling, and more

July 6, 2012

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

* Romney campaign’s missteps have some Republicans grumbling. Steve Holland – Reuters. Conservatives were particularly disappointed in Mitt Romney’s policy dance this week over whether requiring Americans to buy health insurance under Obama’s healthcare plan should be considered a tax, as the Supreme Court ruled last week, or a penalty. His position put the presumed party nominee squarely in opposition to the view held by Republican leaders of Congress and many Republican voters. Some Republicans said that by continuing to discuss the healthcare ruling, Romney’s team was reminding voters of his role in creating the Massachusetts plan – and diverting the campaign from its focus on jobs and the economy, which most Republicans see as Obama’s biggest weakness. Link

* In defending his healthcare plan, Romney often called its mandate a tax. Michael Shear and Ashley Parker – The New York Times. Four months before Mitt Romney signed his healthcare plan into law in Massachusetts in 2006, he told a conservative group that the state’s tax code would be the hammer that would make the plan work. As the Massachusetts governor and then as a presidential candidate, Romney spent the next six years describing in a variety of different ways the possible punishments for ignoring the Massachusetts mandate: as “free-rider surcharges,” “tax penalties,” “tax incentives” and sometimes just as “penalties.” Link

* Tax vote splits snarled Atlanta. Cameron McWhirther – The Wall Street Journal. Voters here will decide this month whether to increase their sales taxes by a penny to raise billions of dollars for improved roads and mass transit in a city notorious for its grinding congestion and dysfunctional train and bus service. Political and business leaders conceived the referendum— for a tax of one cent on the dollar, in addition to any other taxes in a given county — several years ago and got the proposal through the state legislature in 2010. They estimate that the tax would raise $8.5 billion within the next decade for projects they say are desperately needed to help Atlanta heal its battered economy and improve its quality of life. Link

* VW finds 1 share saves $1.1 billion in tax with loophole. Aaron Krichfeld and Dorothee Tschampa – Bloomberg Businessweek. For Volkswagen AG (VOW), what a difference a share makes. By paying the purchase price of 4.46 billion euros ($5.58 billion) plus 1 VW share for the 50.1 percent stake in Porsche SE (PAH3)’s automotive business it doesn’t already own, the Wolfsburg, Germany-based carmaker is avoiding an additional tax bill of more than 900 million euros. The share payment allowed VW to classify the deal as a restructuring rather than a takeover, a tax-saving plan approved by German tax authorities. Link

* New York City apartment owners will get tax break renewed. Reuters. New York City residents who own cooperative and condominium apartments will get the benefit of a property tax break replacing one that had expired under an accord between the state legislature and the governor. In May, New York City’s Independent Budget Office estimated that the city would collect an extra $445 million of revenue from 365,000 apartment owners if the tax break was allowed to expire. Link

* Rihanna sues ex-accountants, says she lost millions. Christine Kearney – Reuters. Pop star Rihanna has sued her former accountants for mismanaging the singer’s finances, including claiming they earned huge commissions from concert tours that resulted in her losing millions of dollars. In a lawsuit filed in Manhattan federal court that surfaced on Thursday, the 24-year-old singer and her tour company, Tourihanna, is seeking an unspecified amount of compensatory damages and loss of earnings from accountancy firm Berdon LLP and former employees Michael Mitnick and Peter Gounis. Link

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