Tax Break

Essential reading: Attacks on Romney for offshore assets, taxes heat up, and more

July 11, 2012

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

* Attacks on Romney for offshore assets, taxes heat up. Jeff Mason and Steve Holland – Reuters. President Barack Obama’s re-election team stepped up attacks on Mitt Romney for holding offshore assets and urged him to release more tax returns, pushing hard on an issue that could be a weak point for the Republican presidential candidate. The Obama campaign and top Democrats took to the Internet and airwaves on Tuesday with accusations that Romney is being secretive about his wealth as they sought to cement an image of the Republican candidate as a multi-millionaire who is out of touch with ordinary Americans. Link 

* Romney tax plan would eat into popular breaks: study. Kim Dixon – Reuters. Republican presidential candidate Mitt Romney’s pitch to slash taxes by 20 percent across-the-board would require cuts of about $320 billion in popular tax breaks to avoid adding to the deficit, a nonpartisan analysis said on Tuesday. The report by the Tax Policy Center found that to pare tax rates to the level promised by Romney, a third of the $1.1 trillion in so-called federal tax expenditures would have to be axed to prevent the federal budget deficit from growing. Link

* Little-known U.S. board stokes hot pension debate. Nanette Byrnes – Reuters. The feedback was swift and often scathing when a little-known public board signaled its intent to toughen the accounting rules governing state and local pension funds of millions of U.S. public employees, intensifying worries over a shortfall of billions of dollars. The plan by the Governmental Accounting Standards Board (GASB) – which was approved on June 25 – drew praise from the American Institute of Certified Public Accountants and from investors looking for transparency in the $3.7 trillion municipal bond markets. Link

* Tax businesses see profits in healthcare law. Patrick Temple-West – Reuters. While some see the new healthcare law as a source of controversy, tax preparation companies see it as an opportunity, hoping it will bring in millions of new and confused customers. New customers for tax preparation businesses could include people who, for lack of income, have not needed to file tax returns in the past. People applying for healthcare benefits in 2013 may have to file tax returns for 2012. Link

* For most, tax rates hit lows in 2009. John McKinnon – The Wall Street Journal. Average federal tax rates paid by Americans in many income groups fell to record levels in 2009, but rose for the top 1 percent of earners, according to new data from the Congressional Budget Office. The nonpartisan CBO found that the average tax rate for most filers dropped that year, often to lows dating back to 1979 when the data series began, because of lower incomes during the recession and new tax breaks. Link 

* States face tough choice even as downturn ends. Michael Cooper – The New York Times. The debate over the proper balance between taxing and spending has been raging in Congress, on the presidential campaign trail and in statehouses around the country, and no two states have settled it more differently this year than Maryland and Kansas, whose fiscal years began July 1. Link 

 * Cameron and Hollande clash on tax. Kiran Stacey and Hugh Carnegy – The Financial Times. David Cameron and François Hollande have clashed over the effect of Hollande’s plans to set a 75 percent top rate of income tax , which Cameron has said will drive French businesses to Britain. Speaking at an otherwise jovial news conference during his first official trip to the UK, the French president insisted that the new tax rate would not have that effect. Link

* India assesses Swiss bank accounts. Mukesh Jagota and Megha Bahree – The Wall Street Journal. India’s tax department is looking at the Swiss bank accounts of about 700 Indian nationals, and will prosecute them if it detects any evasion of taxes, a senior finance ministry official said Tuesday. He rejected media reports which said that some of the people on the list would be granted amnesty in exchange for information, stressing that the government has no plans of giving preferential treatment to anyone. Link 

* Mr. Romney’s financial black hole. The New York Times editorial. Paying taxes forthrightly has long been a matter of civic pride for most American politicians, a demonstration of honesty and of a willingness to share in society’s burdens. Since the Watergate era, presidential candidates have released several years of tax returns, allowing voters to peer at their financial choices and discern their entanglements. Mr. Romney has resisted all demands for more disclosure, leading to growing criticism from Democrats that he is trying to hide his fortune and his tax schemes from the public. Given the troubling suspicions about his finances, he needs to release many more returns and quickly open his books to full scrutiny. Link

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