Tax Break

Essential reading: Politics complicates the math in ending tax breaks for rich, and more

November 21, 2012

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

* Politics complicates the math in ending tax breaks for rich. Annie Lowrey – The New York Times. Whether to raise revenue through increasing tax rates or cutting loopholes has become a central sticking point in the negotiations on a major debt deal. Congressional Republicans have drawn their line: they might accept higher revenue, but only through the reduction of tax breaks. Link

* Most households face ‘fiscal cliff.’ John McKinnon, Kristina Peterson and Josh Mitchell – The Wall Street Journal. Almost all American households would take a financial blow next year—and low-income families would be among the hardest hit—if the White House and Congress fail to solve the “fiscal cliff” of big tax increases and spending cuts set to start Jan 2. Link

* South Carolina tax chief resigns after taxpayers hit in cyber attack. Harriet McLeod – Reuters. The head of South Carolina’s tax collection agency has resigned after hackers gained access to state computers and the personal information of nearly 4 million state taxpayers, including Social Security numbers, Governor Nikki Haley said on Tuesday. Link

* Would a carbon tax cut emissions drastically? Not on its own. Brad Plumer – The Washington Post. With a carbon tax in place, U.S. greenhouse gas emissions do start declining rather than rising. That’s a start. But by 2030, emissions stay flat, even though the carbon tax keeps rising and rising. Link

* The impact of the ‘fiscal cliff’ on your paycheck. Ann Carrns – The New York Times. Unless you’ve been living in a cave, you’ve probably heard of the dreaded “fiscal cliff,” the combination of federal tax increases and spending cuts looming in January. But do you know how that fiscal cliff may affect your paycheck? Link

* New Italy tax evader tack: Scare them. Manuela Mesco – The Wall Street Journal. The Italian government, in its perennial quest to stamp out tax evasion here, has a new message for tax cheats: You know who you are. That’s the idea behind a tax-cheat self-test, a Web application that allows people to gauge whether their declared income is in line with what they spend yearly on housing, transport, education and other expenses such as the gym or manicures. Link

* German-Swiss tax deal set to fail. James Angelos and Andreas Kissler – The Wall Street Journal. Germany’s opposition Social Democrats and Greens are set to block passage Friday of a Swiss-German tax accord, scuttling a controversial deal to get Swiss banks to hand over taxes owed by German citizens with secret bank accounts there. The bilateral treaty was passed by Chancellor Angela Merkel’s center-right coalition parties in the lower house of parliament, but the upper house, which represents Germany’s 16 states, must still ratify the treaty for it to become law. Link

* Revenue ‘overwhelmed’ by tax avoidance. Vanessa Houlder – The Financial Times. Up to 10 billion pounds ($15.91 billion) of tax revenue is at risk from contrived avoidance schemes sold to tens of thousands of individuals and small businesses over the past 10 years, according to official findings branded “staggering” by MPs. Margaret Hodge, who chairs the Commons public accounts committee, said Revenue & Customs needed a robust plan to deal with a “mountain” of 41,000 open tax avoidance cases. Link

($1 = 0.6284 British pounds)

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