Tax Break

Essential reading: Most Americans face lower tax burden than in 1980, and more

November 30, 2012

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

* Complaints aside, most face lower tax burden than in 1980. Binyamin Applebaum and Robert Gebeloff – The New York Times. Most Americans in 2010 paid far less in total taxes — federal, state and local — than they would have paid 30 years ago. The combination of all income taxes, sales taxes and property taxes took a smaller share of their income than it took from households with the same inflation-adjusted income in 1980. Link

* Obama’s cliff offer spurned. Janet Hook, Damian Paletta and Carol Lee – The Wall Street Journal. President Barack Obama made an opening bid in budget talks with Republicans that calls for a $1.6 trillion tax increase, $50 billion in infrastructure spending in 2013 and new power to raise the federal debt limit, a provocative set of demands that Republicans said represented a step backward in efforts to avoid looming tax increases and spending cuts. Link

* Analysis: Democrats’ discord undercuts Obama estate tax push. Kim Dixon – Reuters. Divisions among Democrats are undermining President Barack Obama’s push to raise the U.S. estate tax on inherited wealth, just weeks before the arrival of the “fiscal cliff” could drive the present estate tax rate even higher than Obama proposes. Link

* A menu of revenue-raising options. John McKinnon – The Wall Street Journal.
President Barack Obama and congressional leaders, seeking to raise revenue as part of their high-stakes budget talks, have an extensive menu of options for increasing tax bills. Link

* Deal makers scramble as cliff nears. Telis Demos and David Benoit – The Wall Street Journal. Deal makers and their clients are hustling to sell chunks of stock or whole companies before possible tax increases in the new year. The threat of losing gains to the tax man has some companies, private-equity shops, venture capitalists and corporate insiders looking to book profits in the waning days of the year. Link
* Charities fight to keep tax break on donations. Naftali Bendavid – The Wall Street Journal. Charitable deductions are again in the cross hairs as Washington tries to avert tax increases and spending cuts. After years of successfully fending off such efforts, nonprofits worry this time could be different. Link

* For small businesses, more than income tax rates are at stake in deficit talks. Robb Mandelbaum – The New York Times.
Since the recession, Congress has allowed companies to expense more investment under Section 179, but the cap fell sharply in 2012, and is scheduled to fall sharply again in 2013, to just $25,000. Link

* Big companies set to divulge tax details. Vanessa Houlder – The Financial Times. Big companies are set to divulge more details of their tax affairs as they try to fend off pressure over aggressive tax planning from members of parliament, investors and the media, according to a leading firm of advisers. KPMG, the professional services firm, said there had been a “sea change in mood” towards tax disclosures after intense public criticism of the low corporate tax payments of some multinationals. Link

* The great 2012 cashout. The Wall Street Journal editorial. Perhaps you’ve heard from various economic sages that tax rates don’t matter either to economic growth or taxpayer behavior. Don’t tell that to the companies and individuals who are busy cashing out their investments or paying dividends to get ahead of the Obama tax scythe in January. Link

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