Tax Break

Essential reading: Airline industry’s tax troubles, and more

May 7, 2013

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

* Tax proposals open a debate on airline industry’s troubles. Susan Stellin – The New York Times. A $300 domestic airline ticket now includes about $60 in taxes — or 20 percent of the total fare — which pays for things like air traffic controllers, airport improvements, customs and immigration inspections and checkpoint screening. Link     

* Indefinitely reinvested foreign earnings on the rise. Maxwell Murphy – The Wall Street Journal. Foreign profits at U.S.-based multinational companies will soon top $2 trillion. But much of that sum is unlikely to return to the U.S., regardless of the status of U.S. tax rules, as it already has been spent abroad. Link   

* A strategy for business owners to avoid investment tax. Arden Dale – The Wall Street Journal. Before the tax strategy can be employed, advisers need to examine their business-owning clients’ Forms K-1 to determine if they are actively involved or whether they only have a passive role like an investor. Link    

 * Hopes of a truce for Vodafone and India are fading. James Crabtree – The Financial Times. A much-anticipated deal to settle the $2.6 billion tax row between the Indian government and Vodafone appears unlikely to happen for at least another year, in a further blow to faltering investor confidence in Asia’s third-largest economy. Link    

* Switzerland: Haven feels pressure to conform with global data sharing rules. James Shotter – The Financial Times. For a long time the Swiss tradition of bank secrecy was a potent calling card for the country’s private banks, helping them to draw in money from all over the world. Link    

* Backroom Internet tax ambush. The Wall Street Journal editorial. Now that the Senate has approved a bill to give state and local governments more power to collect Internet sales taxes, the bill’s author intends to find out what’s in it. Link

 * Muni bonds deserve a tax break. Manju Ganeriwala – The Wall Street Journal opinion. Unfortunately, President Obama’s budget includes a provision to limit the tax-exempt status of these bonds. This would make it more costly for governments, and ultimately taxpayers, to improve America’s roads. Link

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