Essential reading: Companies’ profits abroad save on taxes, and more

March 11, 2013

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

* More U.S. profits parked abroad, saving on taxes. Scott Thurm and Kate Linebaugh – The Wall Street Journal. A Wall Street Journal analysis of 60 big U.S. companies found that, together, they parked a total of $166 billion offshore last year. That shielded more than 40 percent of their annual profits from U.S. taxes. Link

* As momentum builds toward tax reform, lobbyists prepare for a fight. Jerry Markon – The Washington Post. Lobbying over the tax code has more than tripled since President Barack Obama took office, disclosure records show. Link 

* Overseas tax savings for U.S. drugmakers under threat. Drew Armstrong – Bloomberg news. The six biggest U.S. drugmakers avoided paying $7.05 billion in U.S. taxes last year by shifting their profits overseas. That’s almost double the amount they saved using the same strategy 10 years earlier, according to data compiled by Bloomberg. Link

* In search of debt deal, Obama walks a narrow path. Richard Stevenson and John Harwood – The New York Times. Some Republican senators and aides, publicly and privately, have expressed an openness to accepting revenue increases as part of a loophole-closing overhaul of the tax code. Link 

* L.A. tax-hike vote patterns tell a tale of two realities. Davide Zahniser – The Los Angeles Times. Los Angeles voters last week rejected a proposed city sales tax increase that the mayor, the police chief and other civic leaders said was vital to shoring up the Los Angeles Police Department. Link 

* ‘Nanny tax’ offenders get a break. Arden Dale – The Wall Street Journal. Employing a nanny or other household workers can open a can of worms with the Internal Revenue Service, but the agency wants to make it easier for people who mishandle taxes for their hired help to put things right. Link

* In the South and West, a tax on being poor. Katherine Newman, The New York Times opinion. Southern states have steadily increased the tax burden on their poorest citizens by shifting the support of the public sector to sales taxes and fees for public services. Link

* A new Obama? The Wall Street Journal editorial. President Barack Obama’s campaign to portray the modest sequester budget cuts as Apocalypse Now has backfired, and the Republicans aren’t budging on his demand to raise taxes again. Link

* Quit relying on your tax refund. Michelle Singletary – The Washington Post opinion. A majority of respondents in an online poll said they intentionally have too much money withheld from their pay so that they can receive that refund. Link

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