Tax Break

Essential reading: Boehner’s backup tax plan shakes up ‘fiscal cliff’ negotiations, and more

December 19, 2012

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

* Boehner’s backup tax plan shakes up ‘fiscal cliff’ negotiations. Paul Kane and Lori Montgomery – The Washington Post. House Speaker John A. Boehner veered off the bipartisan course he had been charting toward a broad tax-and-entitlement deal with President Obama and instead Tuesday pushed a GOP package to extend tax cuts for income up to $1 million. Link  

* Rubio responds to Plan B: Raising taxes not the right way. Natalie Jennings – The Washington Post. Senator Marco Rubio joined other Republicans in offering a tempered response to House Speaker John Boehner’s proposed “Plan B” legislation to avoid the “fiscal cliff.” “I continue to know that raising taxes on anybody is not a good way to generate economic growth,” Rubio said. Link  

* Proposed cap on federal tax deductions would hit California hard. Michael Hilzik – The Los Angeles Times. The plan to cap federal tax deductions at either a set figure or a percentage of income would strike deepest and hardest mostly at residents of California, as well as other populous states with high levels of government services, high state and local taxes, and relatively expensive housing. Link  

* Swiss, facing EU tax pressure, ponder how to attract firms. Emma Farge and Caroline Copley – Reuters. Cash-strapped foreign governments have already chipped away at the secrecy that allows rich individuals to store tax-free funds in Swiss bank accounts. Now Europe’s governments have turned the spotlight on the incentives Switzerland offers companies. Link  

* A bad budget deal. The Wall Street Journal editorial. It’s clear by now that the budget talks are drifting in a drearily familiar Washington direction: Tax and spending increases now, in return for the promise of spending cuts and tax and entitlement reform later. This is a bad deal for everyone except the politicians who want more money to spend. Link

* How local tax rates affect high-income professionals. Victor Fleischer – The New York Times opinion. The prospect of higher marginal tax rates in states like New York and California raises concerns about the impact of taxes on the behavior of high-income individuals. Will Wall Street executives and fund managers flee to low-tax jurisdictions like Florida and Texas? Link

* Why Obama dropped his $250,000 tax target. Will Marshall – The Wall Street Journal opinion. By settling for something less than unconditional surrender, the president could get a deal that will avoid plunging the U.S. economy into austerity and set the stage for a historic tax overhaul next year. Link  

* A Christmas wish for charities. Kimberly Dennis – The Wall Street Journal. The nonprofit lobby opposes the 28 percent cap that President Obama has proposed for households making more than $250,000 (in other words, limiting the amount of the tax reduction to no more than 28 cents per dollar of donation). It also opposes the dollar limitation on itemized deductions that some Republicans have suggested. Link

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