Tax Break

Essential reading: In fog of numbers, little tax clarity from Obama-Romney, and more

October 5, 2012

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

 * In fog of numbers, little tax clarity from Obama-Romney. Kevin Drawbaugh and Kim Dixon – Reuters. For an event so freighted with expectations of tax insights, the Obama-Romney debate on Wednesday offered few clues on what the candidates’ tax plans could mean for average Americans. Republican nominee Mitt Romney stuck to his strategy of promising tax cuts. To pay for this, he pledged again to close yet-to-be-named tax loopholes. And he said new tax revenues would come from economic growth spurred by lower taxes. Link  

* Caps on tax deductions find favor in both parties. John McKinnon – The Wall Street Journal. The idea of limiting personal income-tax deductions is gaining traction in both parties as a way to raise more federal revenue without raising tax rates or scrapping popular breaks. Republicans consider this a way to prevent rate cuts they seek from widening the budget deficit, while Democrats see the extra revenue as a means to shrink the deficit or fund programs. Link

* Romney benefits from rigorous defense of tax plan. Lori Montgomery – The Washington Post. With his forceful denial of charges that he would raise taxes on the middle class, Mitt Romney used Wednesday’s debate to launch an aggressive new effort to regain his footing in the battle over taxes. In one of the debate’s first exchanges, the Republican presidential nominee directly challenged President Obama’s assertion that Romney’s tax plan would finance big new breaks for the wealthy by wiping out popular deductions for those who earn less than $250,000 a year. Link

* MPs slam public sector tax avoidance. Vanessa Houlder – The Financial Times. Tax avoidance in the public sector is “staggeringly inappropriate”, MPs said on Friday as they piled more pressure on the civil service and the BBC over the use of “off-payroll” arrangements for paying permanent staff. A cross-party committee said too many employees had been paid for too long using these arrangements, which raised suspicions of tax avoidance, put value for money at risk and failed to meet the standards expected of public officials. Link

* Pastors to challenge IRS over political endorsements, and they’re likely to get away with it. Lilly Fowler – The Washington Post. As part of “Pulpit Freedom Sunday,” on Oct. 7, religious leaders across the country will endorse political candidates — an act that flies in the face of Internal Revenue Service rules about what tax-exempt organizations, such as churches, can and cannot do. Link

* About that ‘$90 billion’ green energy tax breaks. Robert Semple – The New York Times opinion. Various truth squads have identified at least two dozen factual misstatements by Mitt Romney in 38 minutes of debate time on Wednesday night. Several involved energy policy, and two of these were particularly outrageous. Mitt Romney asserted that President Obama had “provided $90 billion in breaks to the green energy world.” This was a piece of masterful spin, though not an outright falsehood. Link 

* A recipe for cutting corporate taxes. Robert Pozen – The Washington Post opinion. Amid all the division on Capitol Hill, both parties generally agree that the corporate tax rate, which at 35 percent is among the highest in the world, needs to be cut. During Wednesday’s presidential debate, both candidates advocated a significant reduction in the corporate tax rate. Yet the federal budget’s unsustainable fiscal path should preclude a large unfunded tax cut. Link

 

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