* US payroll tax talk mired in election-year politics. Richard Cowan and Donna Smith – Reuters.
Republican and Democratic leaders accused each other of bad faith negotiations on Tuesday as both parties played hardball in talks to extend a tax cut for 160 million U.S. workers. Both sides agree the payroll tax cut should be renewed for a full year before it expires on Feb. 29, and its extension has been seen as a foregone conclusion. But the parties are far apart over how to pay for it and the rancor of election-year politics complicates lawmakers’ work. They argued over whether to continue a pay freeze on federal workers for another year, saving around $26 billion, and whether to squeeze $31 billion out of the Medicare healthcare program for the elderly. Link.
* Romney’s returns revive scrutiny of lawful offshore tax shelters. Jonathan Weisman – The New York Times.
Mitt Romney’s tax returns suggest the Republican presidential candidate’s personal finances could remain an issue in the presidential campaign. And it highlights how, under the tax code, legality and fairness are not necessarily the same thing. By going offshore, pension funds, universities, foundations and even large individual retirement accounts can structure those investments to avoid that heavy a tax. The issue revolves around “blocker corporations,” set up in tax havens like the Caymans to help nonprofit giants avoid the unrelated business income tax, which was created to prevent nonprofits from straying into profit-making ventures that compete with taxpaying companies. Although not illegal, so-called UBIT blockers cost the U.S. Treasury nearly $1 billion a decade, according to Congress’s bipartisan Joint Committee on Taxation. Link.
* Senate highway bill would tap into individual’s retirement money. John McKinnon – The Wall Street Journal.