Tax Break

Essential reading: Consensus on increasing tax revenue, a wide gulf on how to do it, and more

November 26, 2012

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

* ‘Fiscal cliff’: Consensus on increasing tax revenue, a wide gulf on how to do it. Lori Montgomery – The Washington Post. For the first time in decades, a bipartisan consensus has emerged in Washington to raise taxes. But negotiators working to avert the year-end “fiscal cliff” remain far apart on crucial details, including how taxes should go up and who should pay more. Link

* Geithner to play key negotiation role. Damian Paletta – The Wall Street Journal. Timothy Geithner joined the Obama administration during a crisis. He’s hoping not to leave during one. The White House has tapped the Treasury secretary as its lead negotiator in deficit-reduction talks with Congress. Link

* Tax moves to make now. Laura Saunders – The Wall Street Journal. The annual scramble to make smart tax moves before Dec. 31 is proving especially vexing this year. Huge questions remain unanswered even for the 2012 tax year. Link

* Higher gas-tax idea joins fiscal-cliff talks. Josh Mitchell – The Wall Street Journal. States and business advocates are maneuvering to use the current budget negotiations in Washington to win support for a long-sought increase in the federal gasoline tax—one of a grab bag of proposals various groups are seeking to tuck into a deal. Link

* The uneven bite of limiting tax deductions. Alan Zibel – The Wall Street Journal. Limiting personal income-tax deductions and other federal tax breaks, an idea gaining momentum as part of a fix for America’s budget crisis, would hit some parts of the country harder than others. California taxpayers took the highest itemized deductions on average compared with the 49 other states and District of Columbia. Link

* A minimum tax for the wealthy. Warren Buffett – The New York Times opinion. Let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if — gasp — capital gains rates and ordinary income rates are increased. The ultrarich, including me, will forever pursue investment opportunities. Link

* More chips for tax reform. Steven Rattner – The New York Times opinion. It was the absurdly low rate on capital gains and dividend income — just 15 percent — that yielded Mitt Romney’s embarrassingly small tax payments. And that’s what also led to Warren E. Buffett’s lament that his tax rate was lower than his secretary’s. Link

* Many moons later, the IRS questions a tax deal. Gretchen Morgenson – The New York Times opinion. The Internal Revenue Service works in mysterious ways. Its wheels grind slowly, but grind they do, as seen in the case of Fairfax Financial Holdings of Toronto. It said that the terms of the transaction failed the most basic test required under tax laws to generate the $400 million benefit. Link

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