Tax Break

Essential reading: Democrats aren’t all on same page on Bush-era tax cuts, and more

July 25, 2012

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

* Democrats aren’t all on same page before vote on Bush-era tax cuts. Jonathan Weisman – The New York Times. On the eve of the first showdown vote on expiring Bush-era tax cuts, it’s the Democrats who appear to be splintering. The Senate will vote Wednesday on whether to proceed to a tax bill that would extend current tax rates and other tax breaks for the middle class and working poor, while allowing income tax, capital gains and dividend rates to rise on earnings over $250,000. The measure will almost certainly fall to a Republican filibuster. Democratic leaders are hoping to get the support of 50 of the 53 Democrats and Democratic-leaning independents in the Senate. Link

* White House tries to prod Congress with new tax report. Jared Favole – The Wall Street Journal. The White House is trying to ratchet up pressure on congressional Republicans, saying a new report shows middle-class families would see their tax bills increase by an average of $1,600 if Congress doesn’t extend tax cuts set to expire at year’s end. “Congress faces a choice,” says a new report released by the White House National Economic Council, which details the costs and benefits of different proposals from President Barack Obama and congressional Republicans over how to handle the Bush-era tax cuts that will expire at the end of the year. Link

* Obama attacks Romney on tax cuts for wealthier Americans. Amy Gardner – The Washington Post. At appearances in Portland Tuesday and in Oakland, Calif., late the night before, Obama issued blistering attacks against Republican Mitt Romney’s plan to cut taxes for the wealthiest Americans. The message has become a cornerstone of the president’s strategy. Link

* U.S. Treasury to release foreign tax pact rules within days. Reuters.
The U.S. Treasury Department will release before the end of July new compliance rules for foreign governments eager to cooperate with looming U.S. tax laws and spare their domestic banks from U.S. fines, a Treasury official said on Tuesday. The expected rules are part of Treasury’s implementation of the Foreign Account Tax Compliance Act, or FATCA, a 2010 anti-tax evasion law. Link

* Little headway in U.S. Congress for online sales tax. Reuters.
U.S. lawmakers debated, but found little agreement on Tuesday on a proposal to impose a national standard for letting state governments impose sales tax on online retail sales. Legislation along these lines has languished for years in the Senate and the House of Representatives, for reasons that were clearly on display at a House committee hearing. Link

* Awakening voters’ curiosity about Romney’s tax returns and Bain years. Alex Sargent – The Washington Post opinion. Pew Research asks Americans if they want to know more about Mitt Romney’s resume, tax returns, and identity, and comes back with this: When it comes to specific details of Romney’s background and experience, 41 percent of voters say they would like to learn more about Romney’s record as governor, 36 percent would like to learn more about his tax returns, while 35 percent want to know more about his record as chief executive of Bain Capital. Link

* The tax cliff endangers seniors. Lewis Hay – The Wall Street Journal. Most people know that the U.S. government is rapidly approaching the edge of a fiscal cliff that will raise taxes for millions of Americans—at every income level and age. What is less known is that seniors, many of whom depend on investment income to fund their retirement, will be hurt the most. Link

* Kasich’s tax swap – The Wall Street Journal editorial. The U.S. fracking boom can improve a state’s tax climate, as evidenced by Governor John Kasich’s plan to convert Ohio’s energy wealth into a tax cut. The Buckeye State currently imposes a relatively low 20-cent severance tax on oil and three cents for gas. But hydraulic fracturing for natural gas and especially crude is now surging in the Appalachian foothills on the eastern side of the state. Link

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