Tax Break

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

 * Seeking ways to raise taxes but leave tax rate as is. Jonathan Weisman – The New York Times. Congressional negotiators, trying to avert a fiscal crisis in January, are examining ideas that would allow effective tax rates to rise for the wealthy without technically raising the top tax rate of 35 percent. They hope the proposals will advance negotiations by allowing both parties to claim they stood their ground. Link  

* Boehner comments show tough road ahead for ‘fiscal cliff’ talks. Roberta Rampton – Reuters. New comments from top Republican lawmaker John Boehner slamming healthcare reforms illustrate how hard it will be for Washington to reach a deficit reduction deal when talks resume next week, analysts said on Thursday. Link  

* Higher gas-tax idea joins fiscal-cliff talks. Josh Mitchell – The Wall Street Journal. States and business advocates are maneuvering to use the current budget negotiations in Washington to win support for a long-sought increase in the federal gasoline tax—one of a grab bag of proposals various groups are seeking to tuck into a deal. Link  

* Republican shift on taxes masks a divided party. The Los Angeles Times. Lisa Mascaro – The Los Angeles Times. When Republicans in Congress say they are willing to put tax revenues on the table in budget talks with President Obama, that offer obscures a divide within their ranks that could thwart a year-end fiscal compromise. Link  

* IRS: Tax rates for wealthiest fall again in 2010. John McKinnon – The Wall Street Journal. Effective tax rates fell for high-income households in 2010, continuing a long-term trend that is fueling momentum for rewriting tax rules. Link to The Wall Street Journal, http://r.reuters.com/zax24t

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

* Politics complicates the math in ending tax breaks for rich. Annie Lowrey – The New York Times. Whether to raise revenue through increasing tax rates or cutting loopholes has become a central sticking point in the negotiations on a major debt deal. Congressional Republicans have drawn their line: they might accept higher revenue, but only through the reduction of tax breaks. Link

* Most households face ‘fiscal cliff.’ John McKinnon, Kristina Peterson and Josh Mitchell – The Wall Street Journal. Almost all American households would take a financial blow next year—and low-income families would be among the hardest hit—if the White House and Congress fail to solve the “fiscal cliff” of big tax increases and spending cuts set to start Jan 2. Link

* South Carolina tax chief resigns after taxpayers hit in cyber attack. Harriet McLeod – Reuters. The head of South Carolina’s tax collection agency has resigned after hackers gained access to state computers and the personal information of nearly 4 million state taxpayers, including Social Security numbers, Governor Nikki Haley said on Tuesday. Link

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

* Tax talks raise bar for richest Americans. David Kocieniewski – The New York Times. For all the broad brush rhetoric of political debate, the tax rate increases and limits on deductions now being discussed by the president and Congressional Republicans are calibrated to take the biggest bite out of the highest earners. Link

* For tax pledge and its author, a test of time. Jeremy Peters – The New York Times. Next to the oath of office, it has been perhaps the most important commitment that Republicans in Congress can make. But the anti-tax pledge and its creator, Grover Norquist, a 56-year-old conservative lobbyist, have never before faced a test as they do now. Link

* Investors show optimism that cliff will be avoided. Jonathan Cheng – The Wall Street Journal. Hopes that lawmakers in Washington will reach an agreement on taxes and spending gave investors new confidence and drove stock indexes to their best day in two months. Link

Just how important is it for public companies to post earnings that meet investors’ expectations? Important enough to knowingly pay more in taxes, according to a recent study by academics at Duke, MIT and UC Irvine, ”Incentives for Tax Planning and Avoidance: Evidence from the Field.”

 It’s hard to get surprised about the idea that meeting or beting their earnings numbers is important to companies, but Duke Professor John Graham, an author of the paper, was surprised that the 600 corporate tax executives they interviewed overwhelmingly said they’d trade real hard cash paid to the government in taxes in exchange for a boost to the earnings number reported to shareholders.

Earnings per share, a number calculated according to the Generally Accepted Accounting Principles, is a “non-cash” number.

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

* Investors rush to beat threat of higher taxes. Nathaniel Popper and Nelson Schwartz – The New York Times. Business owners and investors are rapidly maneuvering to shield themselves from the prospect of higher taxes next year, a strategy that is sending ripples across Wall Street and broad areas of the economy. Link

* Europe seeks more taxes from U.S. multinationals. Eric Pfanner – The New York Times. As governments throughout Europe seek to close gaping holes in their budgets, they are taking aim at United States multinational companies, especially Internet giants like Google and Amazon.com, which pay little or no taxes in Europe, despite generating billions of dollars in revenue on the Continent. Link

* Uneven bite of limiting deductions. Alan Zibel and John McKinnon – The Wall Street Journal. Limiting personal income-tax deductions and other federal tax breaks, an idea gaining momentum as part of a fix for America’s budget crisis, would hit some parts of the country harder than others, with a series of high-income blue states leading the way. Link 

 Some important tax and accounting events in the week to come:

Monday, Nov. 19 • The Securities Industry and Financial Markets Association symposium on the Fair and Accurate Credit Transactions Act (FACTA). 12:30 p.m. ET, SIFMA conference center. New York.

Monday, Nov. 19 – Tuesday, Nov. 20 • Joint videoconferenced board meeting of the U.S. Financial Accounting Standards Board and the International Accounting Standards Board. Norwalk, Connecticut, and London.

Tuesday, Nov. 20 • An update and prediction of congressional action on estate tax from a panel of local lawyers. 12 noon ET, D.C. Bar Conference Center. Washington.

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

 * Less tension this time for Obama, Boehner. Janet Hook and Carol Lee – The Wall Street Journal. The election is over. The fiscal concerns are more acute. And after the August 2011 downgrade of the U.S.’s credit rating, both John Boehner and Barack Obama are painfully aware of the consequences of failure. Link  

* Senate ‘Gang of 8′ says this isn’t its moment in deficit talks. Jonathan Weisman – The New York Times. After years of wrangling, members of the bipartisan group of senators known as the Gang of Eight are ratcheting back expectations for a deficit reduction breakthrough and now say the best they can probably do is offer ideas for the one fiscal negotiation that will truly matter: talks between President Obama and Speaker John A. Boehner that begin in earnest on Friday. Link  

* Obama allies press Republican lawmakers to accept higher taxes. Peter Wallsten – The Washington Post. White House aides and allies are turning parts of President Obama’s reelection machinery into an outside-the-Beltway campaign to pressure Republican lawmakers to accept higher taxes on wealthier Americans, according to people familiar with the planning. Link  

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

* Obama’s “new ideas” likely well-worn tax proposals. Kim Dixon – Reuters. President Barack Obama stuck to his script on Wednesday that he wants taxes on the richest 2 percent of Americans to rise, but said he was open to new ideas to raise new revenues. Link

* At president’s meeting with executives, some push, pull and give. Damian Paletta and Kate Linebaugh – The Wall Street Journal. A key issue at the meeting: What should Washington do to avoid $500 billion in tax increases. Obama is attempting to solicit more feedback from corporate executives while also drumming up support for his plan to rework the tax code. Link

* Wonks dust off radical revenue-raising ideas. Robin Harding – The Financial Times. Tax policy in the US is suddenly in play. The first priority is to resolve the fiscal cliff, but the new environment is prompting wonks to dust off some of their most beloved working papers. Link

U.S. Senator Max Baucus

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

* Senate Finance chair sees flexibility on Bush tax cuts. Kim Dixon – Reuters. The chief Democratic tax-writer in the U.S. Senate said on Tuesday that to steer clear of the fiscal cliff, the top rates paid by the richest Americans must rise in any deal between Congress and the White House, but he suggested there is some flexibility in ways to strike a deal. Link

* Obama sets steep tax target. Janet Hook and Carol Lee – The Wall Street Journal. President Barack Obama will begin budget negotiations with congressional leaders Friday by calling for $1.6 trillion in additional tax revenue over the next decade, far more than Republicans are likely to accept and double the $800 billion discussed in talks with GOP leaders during the summer of 2011. Link

* Obama to open talks with $1.6 trillion plan to raise taxes on corporations, wealthy. Zachary Goldfarb and Lori Montgomery – The Washington Post. President Obama is taking a hard line with congressional Republicans heading into negotiations over the year-end fiscal cliff, making no opening concessions and calling for far more in new taxes than Republicans have so far been willing to consider. Link 

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

* Democrats like a Romney idea on income tax. Jonathan Weisman – The New York Times. Democrats are latching on to an idea floated by Republican presidential candidate Mitt Romney to raise taxes on the rich through a hard cap on income tax deductions. Democrats now see it as an important element of a potential deficit reduction agreement. Link

* U.S. Congress comes back Tuesday to confront ‘fiscal cliff.’ Rachael Younglai and Jason Lange – Reuters. Amid a global fright over Washington’s political brinkmanship, U.S. lawmakers return to the capital on Tuesday with a seven-week deadline to reach agreement on scheduled tax hikes and budget cuts that threaten to trigger another recession. Link

* Paul Ryan breaks post-election silence. Janet Hook – The Wall Street Journal. Rep. Paul Ryan, Mitt Romney’s running mate, is open to including increased tax revenues in a deficit reduction deal so long as it does not involve tax rate increases. Link