Tax Break

Essential reading: Corporate taxes on table in cliff talks, and more

December 12, 2012

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

* Corporate taxes on table in cliff talks. Damian Paletta and Janet Hook – The Wall Street Journal. The White House has told Republicans it would include an overhaul of the corporate-tax code as part of any deal to reduce the deficit, people familiar with the talks said, a move to court business groups as budget negotiations intensify. The White House’s corporate-tax suggestion wasn’t specific, according to officials. Link

* As John Boehner navigates fiscal cliff, House Republican freshmen largely quiet. Rosalind Helderman – The Washington Post. After spending the better part of the past two years loudly defying their leaders, many House Republican freshmen are now trying a new approach: quiet support. They have responded with near-silence as a group largely controlled by House Speaker John Boehner. Link  

* Tax breaks on muni bonds draw scrutiny. John McKinnon – The Wall Street Journal. A rare area of potential agreement between the White House and Republicans in the fiscal-cliff debate could come as a surprise to many investors: Both sides are willing to consider taxing at least a portion of municipal-bond interest paid to higher-income households. Link  

* Amazon, Massachusetts strike deal for residents on sales tax. Greg Bensinger – The Wall Street Journal. Inc. reached an exclusive agreement with Massachusetts to begin collecting sales tax from residents there, but the terms of the deal potentially put the Web giant at a disadvantage to its rivals. Link  

* Google’s Bermuda billions. The Wall Street Journal editorial. In the crime of the century, Google routed $9.8 billion in revenue through a subsidiary headquartered in Bermuda in 2011. Strike that. What Google did was entirely legal, but you wouldn’t know it from the political uproar that has made the search giant the latest target of the higher-tax chorus. Link  

* Taxes are much higher than you think. Edward Prescott and Lee Ohanian – The Wall Street Journal opinion. Tax rates are already high—much higher than is commonly understood—and increasing them will likely further depress the economy, especially by affecting the number of hours Americans work. Link  

* Not all companies would welcome a lower tax rate. Victor Fleischer – The New York Times opinion. The 35 percent rate is more of a “sticker price” than a reflection of the average tax burden. Link

* Democratic senators take issue with the estate tax. The Washington Post editorial. As the year-end “fiscal cliff” nears, Republicans and Democrats continue wrangling over taxes and spending. But not all of the conflict is between the parties. Republicans are engaged in a fierce internal battle over how much — or whether — to concede to President Obama on upper-income tax rates. And on the Democratic side, a brush fire has broken out over the estate tax. Link  

* Gerard Depardieu, exit stage right. The Wall Street Journal editorial. The latest rich Frenchman to make for the hills over high taxes is movie star Gérard Depardieu, who has recently become a resident of Belgium. Link  

* Loopholes to some, lifelines to others. Eduardo Porter – The New York Times opinion. Tax credits and deductions may be murky and convoluted, and perhaps are not the best way to achieve government objectives. But that doesn’t mean they serve no purpose at all. Link

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