Tax Break

Essential reading: Attack targets Romney’s role in Marriott tax deals, and more

August 10, 2012

Mitt Romney speaks at the 38th annual Conservative Political Action Conference meeting at the Marriott Wardman Park Hotel in Washington, February 11, 2011. REUTERS/Larry Downing

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

* Attack targets Romney’s Marriott role. Laura Meckler – The Wall Street Journal. The Obama campaign Thursday released another TV ad suggesting that rival Mitt Romney may not have paid any income taxes at all in prior years, the latest in a relentless campaign centered on his refusal to release more than two years of tax returns. It highlights his role on the audit committee at Marriott International Inc., a period during which the company used improper tax strategies. The ad alleges Romney approved “son of BOSS” tax shelters. Link

* Romney on not releasing more tax returns: ‘I’m not a business’ Aaron Blake – The Washington Post. The man who once said “corporations are people” apparently doesn’t believe the inverse. When pressed on why he’s not releasing more tax returns in an interview with Bloomberg Businessweek, Mitt Romney justified it by saying: “I’m not a business.” “I have met with that requirement with full financial ­disclosure of all my investments, but in addition have provided and will provide a full two years of tax returns.” Link

* Obama knocks Romney on renewable energy, tax shelter. Jeff Mason – Reuters. Obama portrayed federal tax credits for the wind industry as a critical economic necessity that Romney, the former governor of Massachusetts, would nix. “Renewable energy is creating new jobs in states like Colorado and Iowa, my opponent wants to end tax credits for wind energy producers,” Obama told a crowd of some 3,500 people at the Colorado State Fairgrounds in Pueblo. The industry supports 5,000 jobs across Colorado, and 37,000 jobs would be at risk nationwide without the credits, he said. Link

* U.S. municipal downgrades most in a decade. Vivianne Rodrigues and Nicole Bullock – The Financial Times. Moody’s downgraded nearly 300 US municipal issuers in the second quarter, the most for any quarter in more than a decade and the latest sign of the potential pressure building in the market where states and local governments raise money. Local areas across the U.S. have been struggling for several years after the recession sharply undercut revenues, with three cities in California recently filing for bankruptcy in an attempt to alleviate their financial burdens. Link

* Japan parliament passes sales-tax increase. Toko Sekiguchi – The Wall Street Journal. Japan’s parliament passed a landmark tax bill on Friday, finalizing the legal framework to double the nation’s sales tax by 2015 as a step toward fiscal reconstruction. The upper house enactment of the contentious bill marks the end of Prime Minister Yoshihiko Noda’s tortuous 12-month road to raise the tax to 8% in April 2014 and 10 percent in October 2015. While Noda staked his political career on the bill, he had to make some serious compromises and his attention is likely to quickly shift to fending off calls from the opposition for a general election. Link

* If guns do not kill, tax the bullets. Jim Dwyer – The New York Times. In 1993, Democrat Senator Daniel Patrick Moynihan had a proposal to stop gun violence. His solution: Increase the tax on bullets. He wouldn’t raise the tax on ammunition typically used for target shooting or hunting. But he proposed exorbitant taxes on hollow-tipped bullets designed to penetrate armor and cause devastating damage. “Ten thousand percent,” Moynihan said. That would have made the tax on a 20-cartridge pack of those bullets $1,500. “Guns don’t kill people; bullets do,” said Moynihan, who died in 2003. Link

* Romney’s tax plan wouldn’t cut the deficit. Erskine Bowles – The Washington Post. This month, Romney said that his tax reform proposal is “very similar to the Simpson-Bowles plan.” How I wish it were. I will be the first to cheer if Romney decides to embrace our plan. Unfortunately, the numbers say otherwise: His reform plan leaves too many tax breaks in place and, as a result, does nothing to reduce the debt. Link

* The trouble beyond the ‘fiscal cliff.’ Spencer Jakab – The Wall Street Journal. It will be several weeks after the 2013 fiscal year begins in October before the lame-duck Congress tackles January’s “fiscal cliff” of simultaneously expiring tax and revenue measures. Nearly everyone agrees that its impact is too sharp, but if the compromise is instead too gentle, kicking the can down the road, we will have seen this movie before. It’s called “Field of Dreams.” Link

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