Tax Break

Essential reading: Obama, Democrats put tax cuts at center of 2012 agenda, and more

July 12, 2012

Democrats Nancy Pelosi, the minority leader in the U.S. House of Representatives, President Barack Obama, and Senate Majority Leader Harry Reid at the White House in 2010. REUTERS/Larry Downing


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

* Obama, Democrats put tax cuts at center of 2012 agenda. Richard Cowan – Reuters. Congressional Democrats and President Barack Obama on Wednesday plotted their legislative priorities for the months leading up to November’s elections, showcasing an extension of middle-class tax cuts as well as  measures to keep government agencies functioning beyond Sept. 30. Later this month, the Democratic-led Senate is expected to stage a vote on continuing tax cuts for families earning up to $250,000 – an election-year initiative that the Republican-controlled House of Representatives will not go along with. Link  

* Clients of Swiss bank raided in tax probe. David Crawford and Laura Saunders – The Wall Street Journal. German tax inspectors in recent weeks have been raiding the homes of Credit Suisse Group AG clients suspected of evading taxes, according to bank and German government officials. The investigation is centering on about 5,000 clients who between 2005 and 2009 allegedly bought insurance policies at a Bermuda-based subsidiary of the Swiss bank. Link  

* Mentioning potential tax increases, staying mum on some tax cuts. Richard Oppel – The New York Times. President Obama’s campaign has unveiled an attack ad arguing that Mitt Romney’s tax plan is a sop to the wealthy. The ad will run in swing states: Colorado, Florida, Iowa, Nevada, New Hampshire, North Carolina, Ohio, Pennsylvania and Virginia. The ad seeks to paint Romney as an ally of the wealthy and corporations, including those that have sent American jobs overseas. Link  

* California city goes bust amid claim of false accounting. Jim Christie – Reuters. Officials in San Bernardino, California, scrambled on Wednesday to explain the city’s surprise decision to seek bankruptcy protection, with the city attorney backing away from his suggestion that fraudulent accounting may have contributed to the city’s problems. At a late afternoon news conference, City Attorney James Penman, who the day before had told the city council that financial documents had been falsified for years, said: “I do not know if there was criminal intent or not.” 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  

* Spain energy tax to raise $8.3 billion annually: report. Spain’s plans to tax the energy sector more, part of additional government efforts to slash its deficit announced on Wednesday, are expected to raise 6.8 billion euros ($8.3 billion) a year, Spanish daily El Pais reported on Thursday. The measure is part of a swathe of new spending cuts and tax hikes announced by Spain’s Prime Minister Mariano Rajoy on Wednesday to slash 65 billion euros from the public deficit. Link

* New Japan party to oppose tax rise. Toko Sekiguchi – The Wall Street Journal. Japanese political kingpin Ichiro Ozawa unveiled a new party Wednesday, pledging to overturn Prime Minister Yoshihiko Noda’s proposal to double the nation’s sales tax and seriously threatening the premier’s grip on power. While public-opinion polls show that voters have low expectations for Ozawa’s party, it would be the third-largest in the lower house, and could dislodge the prime minister if it joins hands with other opposition parties. Link  

* Tax avoider in chief? David Firestone – The New York Times opinion. Republicans aren’t just in favor of lowering taxes; now they’re applauding wildly complex efforts by the wealthiest Americans to avoid paying billions in taxes by shipping capital to other countries. “It’s really American to avoid paying taxes, legally,” said Senator Lindsey Graham, Republican of South Carolina, on Tuesday. He was defending Mitt Romney, who, as this morning’s editorial in The Times notes, appears to have the most elaborate history of tax avoidance – offshore tax havens, disputed sheltering mechanisms, complex trusts – of any major presidential candidate in history. Link  

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