Tax Break

Essential reading: Wegelin withers under U.S. tax scrutiny, and more

March 4, 2013

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

 * Wegelin’s fall to tax-haven poster child. Reed Alberotti – The Wall Street Journal. In the span of just one year, Wegelin & Co. went from being one of the most prestigious banks in Switzerland to the verge of being sentenced on U.S. criminal charges and becoming essentially defunct. Link    

* Republicans cling to one thing they agree on: Spending cuts. Richard Stevenson – The New York Times. Aware that conservatives could never accept a second round of tax increases this year, Republicans judged that the better course was to take on the economic and political risks associated with the automatic spending cuts. Link     

* Wealthier households carry the spending load. Brenda Cronin – The Wall Street Journal. The consumer sector is increasingly split in two: Wealthier households are spending more. Poorer ones, hammered by higher taxes and rising gas prices, are holding back. Link 

* Tax bills for rich families approach 30-year high. Associated Press. For 2013, families with incomes in the top 20 percent of the nation will pay an average of 27.2 percent of their income in federal taxes, according to projections by the Tax Policy Center. Link 

* Corporate America gears up for tax-reform debate. Hampton Pearson – USA Today. On paper, the 35 percent corporate tax rate is the highest in the industrialized world. Yet in reality, due to loopholes in the tax code and federal subsidies, the effective tax rate is much closer to 12 percent. Link    

* After roads deal, Virginia Gov. McDonnell faces Republican identity crisis. Laura Vozzella and Fredrick Kunkle – The Washington Post. Conservatives have criticized the deal, which is heavy on taxes, after Democrats exacted a written pledge from the governor on Medicaid expansion. Link    

* China’s carbon tax: not so quick. Leslie Hook – The Financial Times. As top political leaders meet this week for China’s annual rubber-stamp congress, carbon tax is not likely to be on the agenda. But a related topic will be: air pollution. Link    

 * World doesn’t end, Obama hardest hit. The Wall Street Journal editorial. Normal Americans awoke Friday to find that the veneer of civilization had not fallen away. If the federal government does end up spending $44.8 trillion over the next decade instead of $46 trillion, they may not notice at all. Link 

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