Tax Break

Essential reading: GOP in a difficult political spot in tax fight, and more

December 5, 2012

Speaker of the House John Boehner walks out with Senate Majority Leader Harry Reid after a bipartisan meeting with U.S. President Barack Obama, November 16, 2012. REUTERS/Larry Downing

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

* In tax fight, GOP seeks a position to fall back on. Jonathan Weisman – The New York Times.
With President Obama insisting on higher tax rates for affluent Americans and winning public support for the idea, Congressional Republicans find themselves in an increasingly difficult political spot and are quietly beginning to look for a way out. Link

* Obama: ‘Fiscal cliff’ deal must include higher tax rates for top earners. Lori Montgomery and Rosalind S. Helderman – The Washington Post. President Obama on Tuesday rejected a GOP proposal to collect new taxes from high earners by limiting their deductions and tax breaks, insisting that any deal to avert the year-end “fiscal cliff” must include an agreement to raise the top income tax rates. Link

* Tax deduction limits may trim deficits, but not easy. Jackie Calmes – The New York Times. Behind President Obama’s insistence that tax rates must rise on higher incomes is a belief that Republicans cannot raise as much revenue as they claim, $800 billion in the first decade, simply by limiting deductions and loopholes. Yet in the past, President Barack Obama supported that option to collect even more. Link

* The value of the mortgage deduction. Gregory Korte – USA Today. Designed to boost homeownership, the mortgage interest deduction is one of the most popular provisions of the tax code. But Internal Revenue Service data show that only a quarter of tax filers claim it. The use of the deduction varies widely from region to region, ranging from a high of 37 percent of taxpayers in Maryland to a low of 15 percent. in North Dakota and West Virginia. Link

* GOP deficit plan irks conservatives. Neftali Bendavid and Carol Lee – The Wall Street Journal. Conservatives on Tuesday took aim at House Speaker John Boehner’s deficit-reduction proposal in the fiscal cliff talks, a dispute that was aggravated by Boehner’s decision to remove some conservatives from prized committees. Link

* Payroll tax cut bolsters Social Security, report argues. Phil Izzo – The Wall Street Journal. The payroll tax cut bolstered the Social Security Trust Fund, according to a new report from Congress’s Joint Economic Committee. Link

* Tax benefit boosts Toll Brothers’ profit. Sarah Chaudhuri – The Wall Street Journal. Toll Brothers Inc. quarterly profit surged as the luxury-home builder was buoyed by a large tax benefit. The latest quarter included a net tax benefit of $350.7 million. Link

* How to get a budget deal instead of the Cliff. Alan Blinder – The Wall Street Journal opinion. I really hate recessions—and you should, too. If you take between 3 percent and 4 percent of total spending out of an economy, a recession is very likely to follow. Link

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