Tax Break

Essential reading: States to seniors: Good times may be ending, and more

January 11, 2013

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

* States to seniors: Good times may be ending. Anne Tergesen – The Wall Street Journal. Some states are starting to have second thoughts about the tax breaks they give older people. For decades, state governments have been generous with those breaks, perhaps because older Americans tend to show up at the polls to vote. Link 

* What business wants: Smaller deficits and lower tax rates, of course. Suzy Khimm – The Washington Post. The U.S. Chamber of Commerce has long stressed that the deficit is principally a problem of spending and entitlements — essentially, the same argument that the GOP is pushing. What’s less clear is whether the chamber would be open to more tax revenue to do the job. Link 

* UBS chief seeks a new moral path. Patrick Jenkins and Brooke Masters – The Financial Times. The new head of investment banking at Switzerland’s UBS on Wednesday talked about the bank’s integrity and ethics – the new buzz theme for banks as they seek to rebuild their battered reputations. Link   

* Tokyo set to raise levy on wealthiest. Mitsuru Obe – The Wall Street Journal. Japan’s new government will likely soon follow the U.S. and France in raising taxes on its wealthiest citizens, amid continued concerns about the country’s massive government debt. Link

* Navigating the dividend storm. Glenn Ruffenach – The Wall Street Journal. The budget deal that emerged in Washington earlier this month provided good news and bad regarding tax rates on dividends, a primary source of income in later life for many retirees. Link  

* Muni market exhales, and perks up. Mike Cherney – The Wall Street Journal. Budget wrangling in Washington roiled the municipal-bond market at the end of last year, sending prices tumbling amid worries that new taxes would be levied on municipal-bond payments. That didn’t materialize, giving a fillip to muni prices in 2013. Link  

* Carbon taxes provoke debate on economic impact. Christopher Schuetze – The New York Times. With the new cap-and-trade system, California joins Ireland, Australia, Norway and many other countries in taxing what most agree is one of the root causes of global warming. Link  

* Cigarette taxes vs. Cigarette smuggling. Catherine Rampell – The New York Times. Three of every five cigarettes consumed in New York State were smuggled in from lower-tax states in 2011. Perhaps not coincidentally, New York State also has the highest cigarette tax rate — $4.35 per pack, not counting the additional $1.50 per pack levied in New York City. Link  

* Flat no longer. The Wall Street Journal editorial. On Tuesday, Lithuania’s finance minister announced plans to replace the country’s 19-year-old flat tax with a progressive-rate system. Slovakia introduced a second tax bracket last month, and in November the Czech Parliament approved a bill doing the same. Link

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