Tax Break

Essential reading: Tax reform tops agenda – and helps explain campaign spending explosion, and more

November 2, 2012

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

 * Tax reform tops agenda – and helps explain campaign spending explosion. Tom Hamburger – The Washington Post. It is no accident that much of the record spending in this year’s election, now funding an avalanche of last-minute ads across the country, comes from groups with a strong interest in shaping federal tax rules. Tax reform is likely to be at the top of the agenda for the next Congress. Link

* For business, vote holds high stakes. Damian Paletta and Brody Mullins – The Wall Street Journal. The outcome of Tuesday’s presidential election carries enormous weight for executives of American businesses, big and small, influencing everything from the taxes they are required to pay to the attitudes of regulators who scrutinize them. Taxes are high on the business worry list. Link  

* Private equity firms try to repair image. Brody Mullins – The Wall Street Journal. The private-equity industry, bruised by relentless Democratic attacks on Mitt Romney and his stewardship of Bain Capital, has mounted a campaign to repair its reputation. Private-equity managers pay a tax rate of 15 percent on much of their income because it comes as “carried interest,” a form of capital gains, rather than salaried income, which at the highest rate would be taxed at 35 percent. Link  

* Grover Norquist: Even if Obama is reelected, taxes aren’t going up. Suzy Khimm – The Washington Post. Grover Norquist, president of Americans for Tax Reform, said no matter who wins the White House, Republicans will oppose allowing any tax cuts to expire or not be restored after Jan 1. and Democrats will fear economic slowdown from tax cuts just as they did two years ago. Link  

* Tax confidentiality hurts transparency. Vanessa Houlder – The Financial Times. The UK Revenue & Customs has warned that its “overriding legal obligation” to preserve confidentiality will hurt its moves to improve transparency in the wake of the row over handling big businesses’ tax affairs. The Revenue’s new code published on Thursday sets out a framework for tax disputes, stipulating that decisions on the largest and most sensitive cases should be made by three tax-expert commissioners, including Edward Troup, the tax assurance commissioner. Link  

* Revenue steps up battle on tax dodgers. Vanessa Houlder – The Financial Times. The UK Revenue & Customs stepped up its battle against tax-dodging by property buyers on Thursday but lawyers warned that the crackdown had not fully closed the loopholes exploited by advertisers of aggressive schemes on the internet. The Revenue’s latest assault on stamp duty land tax avoidance requires disclosure of schemes to avoid tax on lower value property, as well as more information on “sub sale” schemes. Link  

* Tax agency appeals Solyndra’s bankruptcy exit plan – Reuters. The U.S. Internal Revenue Service on Thursday appealed a court decision to approve solar panel maker Solyndra’s plan to exit bankruptcy protection. Solyndra, which filed for bankruptcy in September last year despite a $528 million federal loan, won court approval on October 22 to repay its creditors after a judge overruled objections by the U.S. government. Link  

* Congressional research hit job – The Wall Street Journal editorial. Congressional Research Service author Thomas Hungerford purported to show that 65 years of changes in “top tax rates have had little association with saving, investment or productivity growth.” The timing couldn’t have been better for President Obama, and the usual liberal media suspects picked it up. Link  

* How Romney’s tax plan would encourage offshoring. Teresa Tritch – The New York Times opinion. Mitt Romney wants a so-called territorial tax system, in which the overseas profits of American corporations would escape United States taxation altogether. That would be a big incentive for multinational companies to shift jobs and investments overseas. Link

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