Essential reading: Democrats like a Romney idea on income tax, and more

Welcome from About Cash Flow to the top tax headlines from Reuters and other sources.

* Democrats like a Romney idea on income tax. Jonathan Weisman – The New York Times. Democrats are latching on to an idea floated by Republican presidential candidate Mitt Romney to raise taxes on the rich through a hard cap on income tax deductions. Democrats now see it as an important element of a potential deficit reduction agreement. Link

* U.S. Congress comes back Tuesday to confront ‘fiscal cliff.’ Rachael Younglai and Jason Lange – Reuters. Amid a global fright over Washington’s political brinkmanship, U.S. lawmakers return to the capital on Tuesday with a seven-week deadline to reach agreement on scheduled tax hikes and budget cuts that threaten to trigger another recession. Link

* Paul Ryan breaks post-election silence. Janet Hook – The Wall Street Journal. Rep. Paul Ryan, Mitt Romney’s running mate, is open to including increased tax revenues in a deficit reduction deal so long as it does not involve tax rate increases. Link

* Lobbying effort derails plan for L.A. tax on real estate sales. David Zahniser – The Los Angeles Times. If Los Angeles City Council members vote Tuesday to place a sales tax hike on next year’s ballot, they will have delivered a major victory to the real estate industry. The city’s top budget official spent six months laying the groundwork for a March ballot measure that would have increased the tax on real estate sales. Link

* The bargain needed for tax reform to pass. Jonathan Bernstein – The Washington Post opinion. Tax reform is complex at best, and there’s neither time nor, in the post-election period, energy to make it happen. Once major budget issues are resolved for a while, prospects for tax reform as significant as the 1986 effort are actually quite good. Link

* Looking past fiscal cliff to fixing taxes. Gerald Seib – The Wall Street Journal. The broader question that really ought to be the subject of serious debate is how to take an outdated tax system—one essentially created in 1913 and last seriously updated in 1986—and revamp it for the 21st century. Link 

* Merging to beat year-end tax change. The Wall Street Journal. Independent financial advisers are rushing to get M&A deals done this year. They want to act before the federal tax on long-term capital gains jumps from 15 percent to 20 percent, as it’s slated to do on Jan. 1. But stragglers can forget it. If you’re not very close to a deal now, it’s not happening. Link

* The hard fiscal facts. The Wall Street Journal opinion. President Obama can now proudly claim the four largest deficits in modern history. Tax revenue kept climbing, up 6.4 percent for fiscal 2012, and at $2.45 trillion it is now close to the historic high it reached in fiscal 2007 before the recession hit. Link

Via Reuters – Essential reading: Democrats like a Romney idea on income tax, and more

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