Tax Break

Essential reading: President’s populist pitch divides suburban voters, and more

July 17, 2012

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

* President’s populist pitch divides suburban voters. Colleen McCain Nelson – The Wall Street Journal. Barack Obama and Republican challenger Mitt Romney are battling over suburban, upper middle-class voters, a constituency important to both men. The president drew strong support from suburban voters four years ago. The question in the 2012 contest is whether these voters agree with Obama’s more populist economic message —or whether the tax-the-rich rhetoric is pushing them away. The president last week renewed his effort to extend Bush-era tax cuts for families with an adjusted gross income of less than $250,000 and raise marginal tax rates for wealthier Americans. Link

* Senator Murray says Democrats will let tax cuts expire. Jonathan Weisman – The New York Times. Senator Patty Murray of Washington, a member of the Democratic leadership, said on Monday that her party is prepared to allow all of the Bush-era tax cuts to expire and for automatic spending cuts to kick in unless Republicans give up their opposition to tax increases on the wealthy. Murray’s tough line, in a speech at the Brookings Institution, signaled a stiffening of Democratic resolve a week after President Obama reiterated his demand for a one-year extension in the Bush-era tax cuts only for people earning less than $250,000. Link

* Romney rejects calls on tax returns. Patrick O’Connor and Daniel Lippman – The Wall Street Journal. Mitt Romney on Monday rejected calls from Democrats and some in his own party to release more than his 2010 and 2011 tax returns. Romney defended his decision, saying he was following a precedent set by the GOP nominee four years ago, Arizona Sen. John McCain. Later in the day, senior Romney adviser Eric Fehrnstrom told reporters at a fundraiser in Baton Rouge, La., that the candidate has no plans to release additional returns. “Two years is what John McCain put out,” he said. “We think it’s sufficient.” Link

* Poll finds Americans favor ending tax cuts for wealthy by 2-1 Jonathan Salant – Bloomberg news. Americans in a national poll say by a 2-1 margin that ending the Bush-era tax cuts on annual earnings of $250,000 or more would help the economy, a position President Obama has stressed in his campaign for another term. The survey by the Pew Research Center released yesterday shows that 44 percent said the higher taxes would be beneficial, while 22 percent said such a move would harm it and 24 percent said there would be no effect. Link

* Tax-exempt group’s election activity highlights limits of campaign finance rules. Jonathan Weisman – The New York Times. To Democrats and some campaign finance watchdogs eager to force more transparency in spending by independent groups, Hope, Growth and Opportunity stands out as the kind of “pop-up” organization that operates in virtual secrecy, with legal impunity. Such groups as Hope, Growth and Opportunity can serve as a conduit for large donors focused on races beneath the radar. The group raised $4.8 million, $4 million from one contributor. Link

* Health law opponents challenge tax credit. Louise Radnofsky – The Wall Street Journal. Opponents of the healthcare overhaul are seizing on how tax credits to buy insurance are distributed. Conservative critics have zeroed in on wording in the law that says state-run programs would be the vehicle for subsidizing the cost of mandatory health insurance for lower-income Americans starting in 2014. Opponents of the law say the Internal Revenue Service overstepped its authority in writing regulations, and they are trying to use the discrepancy to challenge one of the core foundations of the law. Link

* U.S. accounting pushback seen as temporary delay. Huw Jones – Reuters. The United States is expected to allow its top companies to use global bookkeeping rules, ensuring they will gain currency despite a lack of enthusiasm from the country’s regulators, accounting industry officials said on Monday. The U.S. Securities and Exchange Commission said on Friday that fullscale adoption of rules known as IFRS and set by the London-based International Accounting Standards Board (IASB), had little support, dealing a blow to hopes among investors of their universal adoption. Link

* Toying with recession. The Wall Street Journal editorial. Democrats must feel really good about their election chances, because their latest campaign strategy is to say how willing and eager they are to leap off the January tax cliff. They’re all but daring Republicans to make the Democrats’ day by refusing to raise taxes before the election. That was the chest-pounding message Monday from Patty Murray, who said on Monday that Democrats will gladly let all of the Bush tax rates expire at the end of the year — even on the middle class, and no matter the economic consequences. Link

* Obama’s IRS snoops abroad. William McGurn – The Wall Street Journal opinion. Within the United States, almost no American has heard of it. Save for the occasional article, it’s gone largely uncovered. And just like Obamacare, the nastiest, job-killing aspects will not hit until after this November’s election. It’s called the Foreign Account Tax Compliance Act, and it’s a doozy. Fatca was built on the theory that Congress would pay for the tax breaks by making fat cats hiding money in their overseas accounts pay their “fair share.” Link

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