Tax Break

Essential reading: As governor, Romney picked winners and losers, no taxes for Lagarde, and more

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

* As governor, Romney picked winners and losers of his own. Andy Sullivan – Reuters. Massachusetts Gov. Mitt Romney’s June 2006 announcement that drugmaker Bristol-Myers Squibb was moving into his state served as a signature accomplishment. The new facility came with a price tag: Romney and other state officials agreed to $67 million in tax breaks and other inducements to ensure the New York-based company picked Massachusetts over rival states like North Carolina. Romney backed tax breaks for film makers and biotech and medical-device manufacturers. His administration promoted venture capital-style funds that extended loans to start-up companies, some of which subsequently went out of business. Link

* Christine Lagarde, scourge of tax evaders, pays no tax. Kim Willsher – The Guardian. Christine Lagarde, the IMF boss who caused international outrage after she suggested in an interview with the Guardian on Friday that beleaguered Greeks might do well to pay their taxes, pays no taxes, it has emerged. As she is an official of an international institution, her salary of $467,940 (£298,675) a year plus $83,760 additional allowance a year is not subject to any taxes. Link

* Anti-tax crusader assails report on Republican shift. Patrick Temple-West – Reuters. Anti-tax crusader Grover Norquist, scourge of any and all tax increases, said on Tuesday that a news report questioning the vitality of his “no new taxes” pledge – a vow taken by many Republican politicians – is overblown. Republicans who have not signed the pledge may be in congressional races they are unlikely to win anyway, while other candidates have rules against signing pledges, he said. Link 

* Japan PM, Ozawa still apart on tax, opposition deal beckons. Tetsushi Kajimoto – Reuters. Japanese Prime Minister Yoshihiko Noda edged closer on Wednesday to a possible deal with the opposition to push through his plan to double the sales tax, after party heavyweight Ichiro Ozawa refused to support his signature initiative. Former finance minister Noda has pledged to bring the plan to a vote in the current session of parliament that ends on June 21, and requires masterful maneuvering to get it passed. Link

* ‘Pasty tax’ u-turn signals uncertainty for UK business. Ainsley Thomson – The Wall Street Journal. Following Chancellor of the Exchequer George Osborne’s u-turn, the meat-filled pastry and parked mobile homes have come to symbolize a government that is prepared to reverse a budget measure if it proves unpopular enough. There is also a significant negative side. The u-turn risks undermining one of the central conditions the annual budget statement is meant to foster: certainty. Link

Governors call for tax cuts in 2012 despite uncertainty

New Jersey's Chris Christie wants tax cuts

In December, hopeful children around the world mailed in their requests to Santa Claus. Now it’s January, and governors across the country are standing before citizens and legislatures using State of the State addresses to lay out their wishes for the coming year. Top of the list, with a few notable exceptions, are tax cuts.

State revenues have climbed from 2009 and 2010 lows, largely on increasing individual income tax receipts. Still, that recovery is seen as tenuous due to a generally tepid economy and concerns that pivotal federal funding to the states could be on the cutting block as the country struggles with its growing debt and deficit.

Governors of a few states, including New York and Missouri, are not calling for cuts but say their states can avoid increasing taxes by relying on shrinking government and other moves to balance their budgets.