Unstructured Finance

Essential reading: Public goals, private interests in ‘Fix the Debt’ campaign, and more

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

* Public goals, private interests in debt campaign. Nicholas Confessore – The New York Times. Many members of the ‘Fix the Debt’ campaign are juggling their private interests with their public goals: they are also lobbyists, board members or executives for corporations that have worked aggressively to shape the contours of federal spending and taxes, including many of the tax breaks that would be at the heart of any broad overhaul. Link

* As tax hikes loomed, some CEOs sold stock. Scott Thrum – The Wall Street Journal. As Congress mulled higher tax rates last month, dozens of corporate executives sold big chunks of stock, saving themselves millions of dollars in taxes. A Wall Street Journal review of securities filings found that 58 executives sold stock valued at $10 million or more in December as talks intensified over raising tax rates. Link

* UK Executives split by company tax dispute. Brian Groom and Vanessa Houlder – The Financial Times. Half of the chairmen of the largest FTSE 100 companies believe the public is justified in being angry about how some multinationals minimize their tax bills, a survey has found. Link

* UK Tax relief extended for angel investors. Jonathan Moules – The Financial Times. Wealthy investors are being offered more incentives to put money into start-up ventures as part of the government’s push to promote Silicon Valley-style “angel investment”. Link

* U.S. gives a late reprieve to wind power developers. Kate Galbraith – The New York Times. Last week, global wind turbine manufacturers heaved a sigh of relief after the U.S. government extended a tax credit considered crucial to the industry. But 2013 will still bring challenges to wind developers around the world. Link

Virginia plan to end gas tax quickly panned

Virginia Governor Bob McDonnell, entering his last year in office, offered on Tuesday a bold plan to finance badly needed road work and transportation expansion in the state.

His plan, to end the state’s 17.5 cent per gallon gas tax and replace it with a 0.8 percent increase in the state sales tax, was quickly booed by tax experts, however.

Their argument: removing the tax’s connection to gas would shift the burden of road repairs and upgrades to the broader population from the daily drivers who use roads most.

Essential reading: After Sandy, tax cuts fade from Christie plan, and more

Ortley Beach, New Jersey after super storm Sandy REUTERS Tom Mihalek

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

 * After Sandy, tax cuts fade from Christie plan. Heather Haddon – The Wall Street Journal. In his annual address to the state on Tuesday, New Jersey Gov. Chris Christie laid out what he said would be a difficult road ahead as the state recovers from Sandy—a somber departure from last year, when he extolled the state’s economic health and centered his agenda around an aggressive income-tax cut. Link

* Despite promise, federal tax-refund debit cards a no go. Ann Carrns – The New York Times. Giving consumers who lack accounts at a bank or credit union the option of getting tax refunds on multiuse, prepaid debit cards may help bring them into the financial mainstream, a report from the Urban Institute finds. But the accounts must be low-cost, easy to use and available early in the tax season to encourage their use. Link 

 * Mega-millionaire, 79, admits offshore tax evasion. Kevin McCoy – USA Today. A Palm Beach heiress and charity benefactor pleaded guilty Tuesday to using foreign bank accounts to hide more than $43 million from the IRS in one of the largest cases in the continuing U.S. crackdown on offshore tax evasion. Link  

Essential reading: Insiders benefited from special dividends, and more

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

* Insiders benefited from special dividends. Maxwell Murphy and Emily Chasan – The Wall Street Journal. Many big companies raced to pay special dividends in the fourth quarter, ahead of potentially large tax increases on cash distributions this year. Most of the one-time payouts, however, came from smaller companies that had higher-than-average ownership by their management, employees and directors. Link 

 * Dealing on a deadline. Carmel Melouney – The Wall Street Journal. With an increase in capital-gains tax looming over the market, commercial property sales volume spurted in the weeks leading up to the new year. Sellers scrambled to close deals, worried that if they waited until 2013 their tax bill on the transactions would be higher. Link 

 * Actor Depardieu denies leaving France for tax reasons. John Irish – Reuters. Film star Gerard Depardieu denied that he was leaving his homeland for tax reasons on Monday, saying that, although he now had a Russian passport, he was still very much French. Link

Goldman: 1, Volcker: 0

By Lauren Tara LaCapra

There’s an interesting article out today from Bloomberg, which accuses Goldman Sachs of skirting the yet-to-be-defined-or-implemented Volcker rule, and accuses its top executives, including CEO, Lloyd Blankfein, of being a hypocrite.

Bloomberg reporter Max Abelson has done some good work on the subject. His article is well written and well sourced—he spoke to at least 20 people and got many of them to go on the record about their former employer and describe how Goldman continues to place bets with the firm’s own money.

Abelson concludes “Goldman Sachs has worked around regulations curbing proprietary bets at banks. “ But what the article really points out is that Wall Street will keep finding new ways to move the goal posts in its favor when it comes to defining and clamping down on prop trading.

Essential reading: More tax revenue to IRS before cliff, and more

 

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

* U.S. tax bonanza may be tapped out. Spencer Jakab – The Wall Street Journal. All the talk about the fiscal cliff and the inadequacy of the last-minute deal to avert it obscures one fact: It probably provided the government with tens of billions of dollars in unexpected tax receipts. Link

* Tax code may be the most progressive since 1979. Annie Lowrey – The New York Times. With 2013 bringing tax increases on the incomes of a small sliver of the richest Americans, the country’s top earners now face a heavier tax burden than at any time since Jimmy Carter was president. Link

* France says no tax rises planned. Inti Landauro – The Wall Street Journal. French Budget Minister Jerome Cahuzac said on Sunday the government isn’t planning any tax increases for the next few years as it tries to offer stability to companies and taxpayers following the exit of high-profile citizens such as actor Gerard Depardieu. Link

Calendar

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

Tuesday, Jan.8

* Panel discussion of the fiscal cliff debate and what is likely to happen on taxes in 2013. 12 noon – 1:30 p.m. ET, Urban Institute. Washington.

* The American Petroleum Institute president Jack Gerard will give a speech on policy recommendations for the new Congress and administration. 12:15 p.m. ET, Andrew Mellon Auditorium. Washington.

Wednesday, Jan. 9

* State and local tax year end review. 12 noon – 2 p.m. ET, D.C. Bar Conference Center. Washington.

Essential reading: Inquiry into tech giants’ tax strategies nears end, and more

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

 * Inquiry into tech giants’ tax strategies nears end. Charles Duhigg and David Koieniewski – The New York Times. Congressional investigators are wrapping up an inquiry into the accounting practices of Apple and other technology companies that allocate revenue and intellectual property offshore to lower the taxes they pay in the United States. Link  

* Step 1: Corporate tax giveaways. Step 2: Outcry. Step 3: Profit. Suzy Khimm – The Washington Post. Pundits on both left and right were outraged when they realized a whole flotilla of corporate tax giveaways were buried in the fiscal cliff deal, ranging from a tax break for race-car track owners to electric-scooter makers. Link  

* IRS quick to issue withholding rules after the tax deal. John McKinnon – The Wall Street Journal. Hours after President Barack Obama signed the bill averting the fiscal cliff, the Internal Revenue Service issued new guidelines for employers on how much to withhold from workers’ paychecks this year. Link  

Essential reading: Cliff fix hits small business, and more

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

* Cliff fix hits small business. Emily Maltby and Angus Loten – The Wall Street Journal. The fiscal-cliff deal didn’t change the corporate tax rate, which is no more than 35 percent. But many small S-Corp businesses will see a tax increase to 39.6 percent. Link

* Small-business tax incentives survive the deal. Robb Mandelbaum – The New York Times. The bill also renews dozens of other income-tax provisions for individuals and businesses through a series of provisions that the legislating class calls “extenders.” And though advocates for small businesses were concerned that legislators might overlook their interests in the high-pressure negotiations, it turns out that their pessimism was unfounded. Link

 * How deal was made, unmade, then saved. Patrick O’Connor and Peter Nicholas – The Wall Street Journal. By early Wednesday, partisans on the left and right had found plenty to grumble about in Congress’s New Year’s deal to avoid going off the fiscal cliff. But it is unlikely there would have been any deal at all to grumble about if not for a Sunday afternoon phone call from one end of Pennsylvania Avenue to the other. Link

Essential reading: Cliff bill means some pay more taxes, and more

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

* Analysis: 77 percent of households to see tax increase. John McKinnon – The Wall Street Journal. The fiscal cliff bill’s impact would be far-reaching for American taxpayers, and particularly painful for very high-income households, according to a new analysis. About 77 percent of American households would see a tax increase compared to their 2012 tax levels, according to the analysis by the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute. Link 

* Amid pressure, House passes fiscal deal. Jennifer Steinhauer – The New York Times. Ending a climactic fiscal showdown in the final hours of the 112th Congress, the House late Tuesday passed and sent to President Obama legislation to avert big income tax increases on most Americans and prevent large cuts in spending for the Pentagon and other government programs. Link

* Congress’s feeble finish to the ‘fiscal cliff’ fiasco. The Washington Post editorial. The compromise bill passed by Congress to avert the worst effects of the “fiscal cliff” is a small, imperfect package that will do too little to address the nation’s long-term debt problem. But for all its weaknesses, the bill’s enactment is far better than a failure by this Congress to act before it adjourns Thursday. Link

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