Tax Break

Essential reading: Candidates split over tax credit for wind energy, and more

August 13, 2012

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

* Candidates split over extending tax credit for wind energy producers. Catherine Ho – The Washington Post. President Obama and presumptive Republican nominee Mitt Romney clashed last week over a federal tax credit for businesses that produce wind and other alternative energy. In campaign events in Colorado, Obama emphasized his support for extending the tax credit and attacked Romney for opposing the extension, framing his opponent’s stance as a threat to job creation. Link

* Ryan wants to give the wealthy even bigger tax cuts than Romney does. Suzy Khimm – The Washington Post. In picking Paul Ryan, Mitt Romney has doubled down on his own campaign promise to give big tax breaks to the wealthy, uniting himself with a candidate who goes even further to do so: While Romney would bring taxes for top incomes down to 28 percent, Ryan has proposed bringing the top rate down even lower, to 25 percent. Meanwhile, Ryan’s plan would actually increase the effective tax rate on the very poorest Americans by getting rid of tax breaks that benefit low earners. Link

* Paul Ryan gave Romney camp several years of tax returns. Reuters. Mitt Romney released two years of his own tax returns to the public, but that didn’t appear to be enough when he vetted running-mate Paul Ryan and other vice presidential candidates. The campaign team for Romney, the Republican presidential candidate, reviewed several years of tax returns from Ryan and others, according to the head of Romney’s VP search process Beth Myers. Link

* Apologetic Swiss banks sweat it out as U.S., Europe mull redress. Katherina Bart – Reuters. Swiss banks hoping to atone for decades of complicity in tax evasion may be left to sweat it out for months as the United States and Germany ponder the right level of punishment. Eleven Swiss banks are under investigation in the United States and there is pressure too from Europe where burdened taxpayers want scalps after numerous banking scandals. The Swiss need a deal to remove the taint from their financial industry. Link

* Japan sales tax increase passed, on pledge of early election. Hiroko Tabuchi – The New York Times. Prime Minister Yoshihiko Noda’s plan to double Japan’s sales tax was approved by Parliament on Friday after months of haggling, but only after Noda promised opposition lawmakers that he would call early elections — a move that is likely to end his term in office and his party’s hold on power. Despite low popularity ratings, Noda, who took office last September, has pushed ahead with the plan to raise the tax to 10 percent from 5 percent by 2015, an increase he says is necessary to start reducing the country’s debt. Link

* In super-rich, clues to what might be in Romney’s tax returns. James Stewart – The New York Times opinion. The Internal Revenue Service made this summer a startling disclosure that six of the 400 super-rich individuals paid no federal income tax. The IRS has never before disclosed that last fact. That data demonstrates that many of the ultra rich can and do reduce their tax liability to very low levels, even zero. Link

* The Kempian roots of Ryanomics. Stephen Moore – The Wall Street Journal opinion. The centerpiece of Paul Ryan’s growth plan is a robust tax reform. The Ryan budget would cut the top personal income rate and the corporate tax rate to 25 percent (10 percent for the middle class) while eliminating unproductive loopholes that complicate the tax code. Lower tax rates in the 1960s, 1980s, and even in the Bush years (2003-07) accelerated growth. Link

* Germany’s wealth grab. The Wall Street Journal editorial. François Hollande has earned his reputation as archenemy of Europe’s wealthy, but don’t imagine that the impulse to soak the rich is exclusively Gallic. Lawmakers in Germany’s opposition parties are calling for a 1 percent tax on wealth and assets exceeding 2 million euros ($2.46 million). The Social Democrat-Green proposal would add 11.5 billion euros ($14.16 billion) to coffers annually, according to calculations by the influential German Institute for Economic Research, or DIW. Link

* A tax plan that defies the rules of math. David Firestone – The New York Times opinion. Mitt Romney wants to keep all the George W. Bush tax cuts, then cut taxes much further, particularly for the rich, but he says the plan won’t grow the deficit by a dime. He won’t say how he will accomplish this — there are no real numbers in his plan beyond a vague pledge to eliminate some loopholes. The Joint Committee would take one look at his substance-free plan and say, we can’t work with this. Romney hurriedly threw together his 20 percent tax-cut plan a week before the Arizona and Michigan primaries in February, at a time when Rick Santorum was proposing a similar idea. Link

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