Tax Break

Essential reading: Financially troubled parts of Europe consider taxing church properties, and more

September 14, 2012

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

 * Financially troubled parts of Europe consider taxing Catholic Church properties. Ariana Eunjung Cha – The Washington Post. Cash-strapped officials in Europe are looking for a way to ease their financial burden by upending centuries of tradition and seeking to tap one of the last untouched sources of wealth: the Catholic Church. Thousands of public officials who have seen the financial crisis hit their budgets are chipping away at the various tax breaks and privileges the church has enjoyed for centuries. Link  

* An expiring tax credit threatens the wind power industry. Kate Galbraith – The New York Times. Wind power companies are closely watching developments in Washington, where a tax credit benefiting wind farms is due to expire at the end of this year. The implications of that could be especially significant in Texas, the top wind power state, which contains about a fifth of the nation’s turbines and is building expensive transmission lines to support more growth. Link  

* House-Senate hearing planned on capital gains taxes. John McKinnon – The Wall Street Journal. The House Ways and Means and the Senate Finance committees, one run by Republicans and the other by Democrats, will sit down for a rare joint hearing next Thursday, this time on the topic of capital gains taxes. It’s the third in a series of joint hearings that the two committees have held during the current Congress on the broad topic of overhauling the bulky U.S. tax code. Link  

* Mere threat of tax cliff already weighing heavily on small businesses. J.D. Harrison – The Washington Post. Small business owners, like so many Americans, are anxiously waiting to see whether Congress can avoid potentially catastrophic spending cuts and tax code revisions scheduled to take place at the end of the year. But already, just the threat of toppling off the tax cliff is weighing on their decisions and bottom lines. Link  

* Senate Dems tee up tax bill, but quick work isn’t likely. John McKinnon – The Wall Street Journal. Senate Democratic leaders signaled their hopes of voting soon on extending a range of short-term tax breaks for businesses and individuals. But Republicans remained skeptical that a vote can happen before the November elections despite the procedural move by Democrats to take up the bill. The Senate is scheduled to recess at the end of next week, and resume work after the Nov. 6 elections. Link  

* Osborne to reject pleas on green tax subsidy. Jim Pickard – The Financial Times. George Osborne is set to reject pleas by big business for the government to subsidize the scrapping of a 1 billion pound green tax by increasing the energy bills paid by small companies. The chancellor said in the spring Budget that he wanted to revise or scrap the “carbon reduction commitment”, which is levied on 2,100 companies with energy bills of more than 500,000 pounds ($805,900) a year. Link  

* A tax tactic that’s open to question. Floyd Norris – The New York Times opinion. The principal means Mitt Romney used to pay low taxes on his hundreds of millions of dollars in income was the technique known as carried interest, which allows managers of private equity funds to treat most of the fees they receive for running the funds as capital gains rather than ordinary income. The technique strikes some — including President Obama — as outrageous, but it is legal under current law. Unless and until Congress changes the law, Romney has every right to take advantage of the technique. Link  

* The Obama street journal. The Wall Street Journal editorial. President Obama is running another ad pretending Mitt Romney has a secret plan to raise taxes on the middle class, which Freudians would call projection. We’re not sure what they’d call the President’s bid to make us his accomplices by invoking The Wall Street Journal, but our term for it is political sociopathy. Link

($1 = 0.6205 British pounds)

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