Tax Break

Calendar

Some important tax and accounting events in the week ahead:

Monday, Oct. 29

U.S. Public Company Accounting Oversight Board member Lewis H. Ferguson speaks to the annual meeting of the National Association of State Boards of Accountancy. 11:15 a.m. EDT, Walt Disney World Swan hotel. Orlando, Florida.

 Tuesday, Oct. 30

U.S. Financial Accounting Standards Board meeting on accounting for financial instruments and consolidation. 8 a.m. EDT, FASB office. Norwalk, Connecticut.

Wednesday, Oct. 31

FASB meeting, followed by an education session on going concern and repurchase agreement accounting. 8:45 a.m. EDT, FASB office. Norwalk, Connecticut.

Thursday, Nov. 1

D.C. Bar off-the-record luncheon. Leonard Kennedy, senior adviser and general counsel to the Consumer Financial Protection Bureau speaks on initiatives under way at the new agency. 12 noon EDT, D.C. Bar Conference Center. Washington.

Essential reading: CEOs call for deficit action, and more

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

* CEOs call for deficit action. David Wessel – The Wall Street Journal. Chief executives of more than 80 big-name U.S. corporations, from Aetna Inc. to Weyerhaeuser Co., are banding together to pressure Congress to reduce the federal deficit with tax-revenue increases as well as spending cuts. The CEOs who signed the manifesto deem tax increases inevitable no matter which party succeeds at the polls in November. Link

* Tax Policy Center in spotlight for its Romney study. Annie Lowrey – The New York Times. A small nonpartisan research center operated by professed “geeks” has found itself at the center of a rancorous $5 trillion debate between President Obama and Mitt Romney. No paper put out during the presidential campaign has proved more controversial than an August study by the Washington-based Tax Policy Center, a respected nonprofit that issues studiously detailed tax analyses. Link

* Tax-evasion allegations dog Greece. Philip Pangalos – The Wall Street Journal. A former Greek finance minister on Wednesday accused financial-crime investigators of failing to pursue leads against Greeks who salted away more than 1 billion euros ($1.30 billion) in Swiss bank accounts, fueling a new round of finger-pointing over Athens’ alleged failure to move against wealthy tax dodgers. Tax evasion costs Greece 28 billion euros, according to a study by Margarita Tsoutsoura of The University of Chicago Booth School of Business—an amount equivalent to up to 15 percent of the country’s gross domestic product. Link

Essential reading: For some of the wealthy, a 0 percent tax on capital gains, and more

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

* For some of the wealthy, a 0 percent tax on capital gains. Arden Dale – The Wall Street Journal. Financial advisers are helping a surprising group take advantage of a 0 percent capital-gains rate set to rise to 10 percent next year: affluent retirees, business owners and even some wealthy philanthropists. The rate only applies to those in the bottom two tax brackets, a group not usually associated with the wealthy. Link

* Starbucks finance chief denies tax claims. Louise Lucas and Vanessa Houlder – The Financial Times. Starbucks has admitted a quarter of its 600 UK-owned stores are running at a loss, in a rebuttal of accusations of tax avoidance, blaming its low corporate tax payments on overexpansion. In an interview with the Financial Times, Troy Alstead, chief financial officer of the global coffee chain, said: “I look forward to the day when we pay a lot more tax.” Link  

* Obama’s remarks aside, no imminent deal on ‘fiscal cliff.’ Jonathan Weisman – The New York Times. President Obama set heads spinning on Capitol Hill when he declared on Monday night during the final presidential debate that sequestration — $1 trillion in across-the-board spending cuts over the next decade — “will not happen.” But no one should conclude that a secret deal to resolve the problem is imminent. It is not. Link  

Essential reading: Checking tax facts from the presidential debate, and more

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

 * Fact check: The ‘territorial tax.’ Josh Hicks – The Washington Post. The president said on Monday that Mitt Romney wants to provide more tax breaks for companies that move overseas. He was referring to Romney’s proposal to enact a “territorial tax” system that would allow U.S.-based companies to bring foreign-earned profits back home without paying U.S. taxes. Link

* Congressman Chris Van Hollen wants to consider another payroll tax holiday. Suzy Khimm – The Washington Post. Neither party seems particularly keen on extending the payroll tax cut for another year. But its defenders are slowly beginning to emerge on the left. Link  

* Romney to target tax and regulation. Stephanie Kirchgaessner and James Politi – The Financial Times. A victory for Mitt Romney next month would bring about a sweeping change in the relationship between business and government by putting tax reform and deregulation at the top of the US domestic policy agenda. Link

Essential reading: Democrats threaten payroll tax cut consensus, and more

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

* Democrats threaten payroll tax cut consensus. James Politi – The Financial Times. Some Democrats in Congress are seeking to include an extension of the $120 billion payroll tax cut in negotiations over the looming “fiscal cliff”, shaking what had appeared to be a bipartisan consensus to allow the measure to expire as planned at the end of the year. The move could complicate the budget talks due to begin after the November presidential election and alarm rating agencies. Link

* How Romney tackled tax changes. Damian Paletta – The Wall Street Journal. As governor of Massachusetts, Mitt Romney pushed changes in the state’s corporate tax code that raised hundreds of millions of dollars, particularly from banks, to help close an annual budget gap of more than $1 billion. Now, as a presidential candidate, Romney is promising an overhaul for the federal tax code. Link

Calendar

Some important tax and accounting events in the week ahead:

Monday, Oct. 22 • Tax Policy Center roundtable discussion of the fiscal cliff and federal budget politics includes Alice Rivlin, former director of the Office of Management and Budget, and former vice-chair of the Federal Reserve. 9 a.m. – 10:30 a.m. EDT, Urban Institute. Washington.

Monday, Oct. 22 – Thursday, Oct. 25 • Federation of Tax Administrators conference on tax expenditures, incentives and the long-term fiscal sustainability of state and local governments, among other topics. Providence, Rhode Island.

Monday, Oct. 22 – Friday, Oct. 26 • New York University Institute on Federal Taxation. New York.

Essential reading: Missouri political donor thrives with no limits, and more

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

* Missouri political donor thrives with no limits. Nicholas Confessore – The New York Times. Since 2008, when Missouri abolished contribution limits, donor Rex Sinquefield has donated more than $20 million to local candidates and political action committees. More than half of that money has gone to advance his signature cause: eliminating state and local income taxes in Missouri, a major source of government revenue, and replacing them with sales taxes. Link  

* JPMorgan: If the payroll tax cut falls, so does growth. Suzy Khimm – The Washington Post. JPMorgan no longer thinks the payroll tax holiday will survive the fiscal cliff negotiations. It’s downgraded its GDP growth forecast for the first quarter from 1.5 percent to just 1 percent and revised its second quarter forecast from 2.25 percent to 1.5 percent. Link

* AARP: Please, let payroll taxes go up. Suzy Khimm – The Washington Post. The AARP thinks it’s time for American taxpayers to pony up. The advocacy group for seniors opposes any further extension of the Social Security payroll tax holiday, which is scheduled to expire on Dec. 31, when the rest of the fiscal cliff goes into effect. Link 

Essential reading: Officials say Obama could veto a bill blocking ‘fiscal cliff’ without tax hike for rich, and more

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

* Officials: Obama ready to veto a bill blocking ‘fiscal cliff’ without tax hike for rich. Lori Montgomery – The Washington Post. President Obama is prepared to veto legislation to block year-end tax hikes and spending cuts, collectively known as the “fiscal cliff,” unless Republicans bow to his demand to raise tax rates for the wealthy, administration officials said. Freed from the political and economic constraints that have tied his hands in the past, Obama is ready to play hardball with Republicans, who have so far successfully resisted a deal to tame the debt that includes higher taxes, Obama’s allies say. Link  

* Voters with questions at debate still have them. Trip Gabriel – The New York Times. Debate questioner Mary Follano, 54, a respiratory therapist with six grown children, some struggling with part-time jobs, said she agreed with President Obama on raising taxes on incomes above $250,000. But she was sympathetic when Mitt Romney said raising taxes on high earners would hurt small-business owners, who create jobs. Link  

* Starbucks faces boycott calls over tax affairs. Jennifer Thompson and Vanessa Houlder – The Financial Times. Starbucks was facing calls for a consumer boycott last night as MPs prepared to investigate claims it has paid just a few million pounds in corporation tax since bringing its coffee shops to the UK 14 years ago. As a campaign against the company gathered pace on social media, politicians and union leaders were among those urging people to avoid its 735 UK stores. Link 

Essential reading: California unions fighting fundraising proposal rather than pushing for tax hike, and more

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

 * California’s labor’s big-money focus on fundraising law may hurt chances of tax hike. Chris Megerian – The Los Angeles Times. California’s Labor unions are pooling their money to fight Proposition 32, which would eliminate their primary political fundraising tool — paycheck deductions — at the same time Gov. Jerry Brown is counting on their support for his tax-hike initiative also on the ballot next month. Link  

* Why tax reform could help growth. Dylan Matthews – The Washington Post. In large measure, what you think about the tenability of Mitt Romney’s tax plan depends on what you think his tax reform proposal can do for economic growth. Optimistic growth estimates have predicted only a mild economic boost from Romney’s proposal — $53 billion of the $360 billion annual cost of the plan would be recouped from higher revenues that result from faster growth. Link  

* Chances of going over fiscal cliff may be higher than experts think. Jeff Sparshott – The Wall Street Journal. What are the odds of the U.S. running off the so-called fiscal cliff — the mix of spending cuts and tax increases that would likely tip the U.S. into recession? On average, economists in the latest Wall Street Journal economic forecasting survey put the probability at just 17 percent, but some economists and analysts say that may be too low. Link  

Essential reading: Manhattan, where everything is lavish except the property taxes, and more

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

 * Where everything is lavish except the property taxes. Elizabeth Harris – The New York Times. The shimmering limestone tower at 15 Central Park West, where apartments routinely trade for upward of $20 million, has become symbolic of the most luxurious upper reaches of New York’s real estate market. Yet despite the residential portion of that Manhattan building is officially valued by the city, for tax purposes, at only $332 per square foot. Link  

* Treasurers worry over accounting for money fund changes. Emily Chasan – The Wall Street Journal. As Treasury Secretary Timothy Geithner moved to reintroduce money market reforms last month, corporate treasurers who invest in the funds are focused on how structural changes might complicate accounting for them. Corporate treasurers are planning for various scenarios, but are getting stumped on accounting issues, Ronni Horillo, assistant treasurer at Google, said on a panel at the Association for Financial Professionals conference in Miami on Monday. Link  

* CEOs urge compromise on U.S. fiscal cliff debt. David Lawder – Reuters. Corporate chief executives ramped up their calls on Monday for Congress to reach a compromise deal that keeps the looming “fiscal cliff” from crushing the U.S. economy and starts to shrink U.S. debt levels. CEOs of some of the largest U.S. companies said that Congress will need to raise taxes on the wealthy and cut federal benefit programs like Medicare and Social Security to effectively shrink federal debt and safeguard economic growth. Link