Unstructured Finance

Essential reading: Tax impact for small business hard to gauge, and more

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

* Tax impact for small business hard to gauge. John McKinnon – The Wall Street Journal. The latest budget offers exchanged between the White House and Republican leaders would raise tax rates on a tiny fraction of small-business owners, but would still affect a sizeable portion of business activity, studies show. Link

* Boehner seeks support for tax increase on the wealthiest. Lisa Mascaro – The Los Angeles Times. As President Obama and House Speaker John A. Boehner took turns blaming each other for the sudden lull in the budget talks, the action continued off-camera Wednesday as the Ohio Republican focused on building support from his conservative majority to increase tax rates on the wealthy. Link 

 * John Boehner’s Plan B would raise taxes on the poor. Dylan Matthews – The Washington Post. While Speaker Boehner’s bill makes permanent the expansion of the Child Tax Credit (CTC) signed into law by George W. Bush as part of the 2001 tax cut deal it does not extend an expansion that was passed as part of the 2009 stimulus package, and has been renewed since then, allowing poor families to refund more of the credit. Link

* Municipalities fight a proposal to tax muni bond interest. Mary Williams Walsh – The New York Times. The Obama administration has proposed capping the tax break that America’s highest earners now receive from municipal bonds. Analysts expect such a cap to be part of a comprehensive tax overhaul package that Congress will take up next year, under a broad fiscal framework now being negotiated by President Obama and House Speaker John A. Boehner. Link

* History lesson: Why the Bush tax cuts were enacted. Glenn Kessler – The Washington Post. George W. Bush had just been elected on a pledge to cut taxes, but his plan did not get much traction among Democrats until then-Federal Reserve chairman Alan Greenspan warned Congress of a dangerous new specter — that the government would pay down the national debt, and there would be no place to park excess funds. Link

Essential reading: Boehner’s backup tax plan shakes up ‘fiscal cliff’ negotiations, and more

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

* Boehner’s backup tax plan shakes up ‘fiscal cliff’ negotiations. Paul Kane and Lori Montgomery – The Washington Post. House Speaker John A. Boehner veered off the bipartisan course he had been charting toward a broad tax-and-entitlement deal with President Obama and instead Tuesday pushed a GOP package to extend tax cuts for income up to $1 million. Link  

* Rubio responds to Plan B: Raising taxes not the right way. Natalie Jennings – The Washington Post. Senator Marco Rubio joined other Republicans in offering a tempered response to House Speaker John Boehner’s proposed “Plan B” legislation to avoid the “fiscal cliff.” “I continue to know that raising taxes on anybody is not a good way to generate economic growth,” Rubio said. Link  

* Proposed cap on federal tax deductions would hit California hard. Michael Hilzik – The Los Angeles Times. The plan to cap federal tax deductions at either a set figure or a percentage of income would strike deepest and hardest mostly at residents of California, as well as other populous states with high levels of government services, high state and local taxes, and relatively expensive housing. Link  

Calendar

Some important tax and accounting events in the week ahead:

Monday, Dec. 17

* Joint Board meeting of the U.S. Financial Accounting Standards Board and the International Accounting Standards Board on revenue recognition. Video webcast.

* U.S. Government Accounting Standards Board chair Robert Attmore addresses New York State Society of Certified Public Accountants Public Schools Committee. Albany, NY.

 Tuesday, Dec. 18

* Colorado Society of CPAs Securities and Exchange Commission and Public Company Accounting Oversight Board Conference. Denver.

Essential reading: Charities battle Obama over taxes, and more

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

 * White House, nonprofit groups battle over charitable deductions. Jerry Markon and Peter Wallsten – The Washington Post. The White House and the nation’s most prominent charities are embroiled in a tense behind-the-scenes debate over President Obama’s push to scale back the nearly century-old tax deduction on donations that the charities say is crucial for their financial health. Link  

* Wealthy Americans gird for their own cliff. Jennifer Smith – The Wall Street Journal. Whatever happens with the “fiscal cliff,” wealthy Americans could be paying their last respects to generous tax breaks that let them pass millions of dollars to heirs and other recipients tax-free. Link  

* With gap wide and time short, Obama and Boehner meet. Jonathan Weisman and Jackie Calmes – The New York Times. With time running short to work out a deal to avert a year-end fiscal crisis, President Obama called Speaker John A. Boehner to the White House on Thursday evening to try to move talks forward even as pessimism mounted that a broad deal could be struck that bridges the substantial gap between the parties on taxes and entitlements like Medicare. Link  

Essential reading: Tax offer pits big companies against small, and more

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

 * Tax offer for firms pits big vs. small. John McKinnon – The Wall Street Journal. The Obama administration’s offer to revamp the corporate tax code as part of the “fiscal cliff” budget talks raises the prospect that tax rates for large and small companies could diverge significantly. Link  

* Boehner tries to contain defections on fiscal unity. Jonathan Weisman – The New York Times. Speaker John A. Boehner moved Wednesday to maintain Republican unity on deficit reduction talks as lawmakers on the far right openly chafed at his leadership and some pragmatists pressed for quick accommodation on tax rate increases on the rich. Link

 * Executives push for ‘fiscal cliff’ deal, even if their tax concerns have to wait. Steven Mufson and Juliet Eilperin – The Washington Post. The business executives, while unenthusiastic about higher taxes, say that avoiding the “fiscal cliff” is their No. 1 priority and that many other key issues can be taken care of in broader tax reform negotiations they hope would take place next year. Link  

Essential reading: Corporate taxes on table in cliff talks, and more

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

* Corporate taxes on table in cliff talks. Damian Paletta and Janet Hook – The Wall Street Journal. The White House has told Republicans it would include an overhaul of the corporate-tax code as part of any deal to reduce the deficit, people familiar with the talks said, a move to court business groups as budget negotiations intensify. The White House’s corporate-tax suggestion wasn’t specific, according to officials. Link

* As John Boehner navigates fiscal cliff, House Republican freshmen largely quiet. Rosalind Helderman – The Washington Post. After spending the better part of the past two years loudly defying their leaders, many House Republican freshmen are now trying a new approach: quiet support. They have responded with near-silence as a group largely controlled by House Speaker John Boehner. Link  

* Tax breaks on muni bonds draw scrutiny. John McKinnon – The Wall Street Journal. A rare area of potential agreement between the White House and Republicans in the fiscal-cliff debate could come as a surprise to many investors: Both sides are willing to consider taxing at least a portion of municipal-bond interest paid to higher-income households. Link  

Essential reading: Boehner tries to keep GOP ranks behind him, and more

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

 * Boehner’s test: Keep GOP ranks behind him. Patrick O’Connor – The Wall Street Journal. House of Representatives Speaker John Boehner’s strategy, and his future as speaker, will get tested between now and year-end as Washington wrestles with negotiations designed to avert tax increases and spending cuts due to begin in early January. Link 

 * Senate Democrats seek delay in medical device tax. Joseph Walker – The Wall Street Journal. A group of 17 Democratic U.S. senators and senators-elect have signed a letter urging for a delay in implementing a tax on the medical-device industry that is scheduled to go into effect Jan. 1, said two people familiar with the matter. Link 

 * Norquist: Revamping gas tax violates anti-tax pledge. Laura Vozzella – The Washington Post. Grover Norquist has a little advice for Virginia legislators as they look around for ways to pay the commonwealth’s ever-growing transportation tab: If you want to honor your no-tax pledge, don’t link the gas tax to inflation. Link 

Can tax on witch-doctors cure Swaziland’s fiscal pain?

The King of Swaziland King Mswati III arrives at Westminster Abbey for the wedding of Britain’s Prince William and Kate Middleton. REUTERS/Toby Melville

While the inhabitants of Capitol Hill and the White House argue over tax breaks for the wealthy, a member of Swaziland’s parliament has struck upon a potential partial solution to the cash crisis in Africa’s last monarchy: hike taxes on witch-doctors.

According to a Reuters report,  the mediums, known as sangomas in the landlocked southern African nation, pay an annual 10 emalangeni ($1.15) license fee, but MP Majahodvwa Khumalo said they had jacked up their fees fourfold in the last few years and should pay more.

Essential reading: Tax arithmetic shows top rate is just a starter, and more

U.S. House Speaker John Boehner speaks to the media outside his office on Capitol Hill in Washington, December 7, 2012. REUTERS/Yuri GripasWelcome to the top tax and accounting headlines from Reuters and other sources.

* Tax arithmetic shows top rate is just a starter. Jackie Calmes – The New York Times. Despite hints in recent days that President Obama and House Speaker John A. Boehner might compromise on the tax rate to be paid by top earners, a host of other knotty tax questions could still derail a deal to avert a fiscal crisis in January. Link

* New taxes take effect to fund healthcare law. Robert Pear – The New York Times. For more than a year, politicians have been fighting over whether to raise taxes on high-income people. They rarely mention that affluent Americans will soon be hit with new taxes adopted as part of the 2010 health care law. Link

Bharti Infratel IPO: What brokerages are saying

(Any opinions expressed here are those of the author, and not necessarily those of Thomson Reuters)

Bharti Infratel’s initial share sale will likely be India’s biggest in nearly two years and key for the country’s troubled telecom sector, which has been hit by regulatory flip-flops.

Price Band: 210 – 240 rupees/share

Issue opens, closes: Dec 11 – Dec 14

The share sale of the telecommunications tower unit of top Indian phone carrier Bharti Airtel Ltd will raise $825 million in the upper end of the price range. The sale comes amidst signs of a revival in the primary market with other smaller private offerings like CARE Ratings, PC Jewellers and Tara Jewels in the process of raising or having recently raised capital.

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