Tax Break

Essential reading: Democrats seek to reassure vulnerable senators on tax cuts, and more

July 13, 2012

Good morning and welcome to the top tax and accounting headlines from Reuters and other sources.

* Democrats seek to reassure vulnerable senators on tax cuts. Kim Dixon – Reuters. The top U.S. Senate Democrat said on Thursday that politically vulnerable lawmakers will be “just fine” if they back President Barack Obama’s plan to extend tax cuts only for households making $250,000 or less, a vote that could be perilous for some facing re-election in November. Democratic Senate Majority Leader Harry Reid’s remarks to reporters came as he tried to steer Obama’s initiative – a centerpiece of the president’s re-election campaign – to Senate passage by the end of this month. Link

* Republicans block small-business tax break on procedural vote. Lisa Mascaro – The Los Angeles Times. One of the top items on President Obama’s to do list – a 10 percent tax break for small businesses that make new hires – got tangled in an election-year tax debate as Republicans led a filibuster to block the measure. The legislation would have provided the tax credit to companies that hire new employees or otherwise expand their payrolls this year, a typically popular approach among the GOP. Republicans in the Senate did not necessarily object to the measure, but they protested on Thursday after Democrats refused to allow votes on other amendments. Link

* Mitt Romney faces new round of calls to release tax returns. Philip Rucker – The Washington Post. Six months after Mitt Romney’s reluctance to release his tax returns tripped him up in the South Carolina Republican presidential primary, the now-presumptive nominee is once again grappling with whether to disclose more information about his personal finances amid mounting pressure from his opponents. For days, Democrats have been demanding that Romney make public additional tax returns that could shed light on his fortune, which is estimated at $190 million to $250 million. President Obama’s reelection campaign and its allies are hinting at nefarious activity, suggesting that Romney has been hiding information pertaining to his Swiss bank account and investments in the Cayman Islands. Link

* My word! U.S. accountants suggest brevity a virtue. Dena Aubin – Reuters. The Financial Accounting Standards Board is seeking comment through Nov. 16 on ways to make financial reports more relevant and useful. Cutting the volume of verbiage is not the main goal but will probably be a result, the Financial Accounting Standards Board said. Link

* Maine governor draws ire with new IRS ‘Gestapo’ comments. Ros Krasny – Reuters. Maine’s Republican governor ignited a fresh firestorm on Thursday when, for the second time in a week, he compared the Internal Revenue Service to the Gestapo, Nazi Germany’s murderous secret police. Democrats suggested that Governor Paul LePage, a Tea Party favorite elected in 2010, was unfit to hold office. Link

* Who is very important? Paul Krugman – The New York Times opinion. What about the argument that we must keep taxes on the rich low lest we remove their incentive to create wealth? The answer is that we have a lot of historical evidence, going all the way back to the 1920s, on the effects of tax increases on the rich, and none of it supports the view that the kinds of tax-rate changes for the rich currently on the table — President Obama’s proposal for a modest rise, Romney’s call for further cuts — would have any major effect on incentives. Link

* The middle class needs a life line. James Carville and Stanley Greenberg – The Wall Street Journal opinion. Tax cuts rank at the bottom of the public’s list of actions and priorities to address our economic problems. Whatever the problem we are addressing — the deficits, Social Security, the economy — voters want to raise taxes on top earners, senior corporate executives and companies that outsource jobs. Conservatives also argue that suffering citizens need a good dose of austerity, Europe-style, combined with growth-producing tax cuts for the top earners — what they call our most productive citizens and job creators. Lowering government spending, they argue, will liberate private resources to stimulate the economy. Link

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