Essential reading: Retailers fear payroll tax will cut consumer spending, and more

Tax News

Tax News - Reuters - Jessica Rinaldi

Reuters – Jessica Rinaldi

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

 * Retailers fear payroll tax will cut consumer spending. Serena Ng – The Wall Street Journal. The tax increase’s effect for companies is that the hit is likely to cement a frugal attitude that led consumers to cut back on eating out and shift to less-expensive store brands. Link

* Companies pay less tax on global profits. Martin Sandbu and Vanessa Houlder – The Financial Times. UHY Hacker Young, an accountancy group, says the total global taxes paid by the average FTSE100 company fell to 24.5 percent of its global profits in 2012, compared with 35.8 percent in 2009. It attributes the fall to companies’ “greater profits overseas, allowing them to take advantage of lower prevailing tax rates in those jurisdictions”. Link

* After tax deal, some gain while others lose. Abha Bhattarai and Steven Overly – The Washington Post. Thanks to a one-year extension of the wind production tax credit, Silver Spring-based Clean Currents, which supplies wind power to establishments such as Honest Tea and Busboys and Poets, is continuing with plans to open offices in two more states and add a dozen employees to its current roster of 25 by the end of this year. Link

* Vodafone, Indian officials to discuss tax case. Prasanta Sahu – The Wall Street Journal. Senior Indian tax officials plan to meet with representatives of Vodafone Group PLC this week to try to resolve a tax dispute with the British company, a senior finance ministry official said. Vodafone is fighting a prolonged battle with the Indian government over a potential tax bill on the company’s 2007 acquisition of a controlling stake in an Indian telecommunications company. Link

* Paying the price, but often deducting it. Gretchen Morgenson – The New York Times opinion. The billion-dollar settlements are big, but they aren’t as big as they look, at least for the banks. That’s because some or all of these payments will probably be tax-deductible. Link

* Greek tax insanity. The Wall Street Journal editorial. Can a country tax itself into economic oblivion? The Greek government imposed another big tax increase Saturday. The latest measures will raise the corporate income tax to 26 percent from 20 percent and push the top individual rate to 42 percent from 40 percent. Link

* E-filing and the explosion in tax-return fraud. Jay Starkman – The Wall Street Journal opinion. Tax fraud, amazingly, is now the third-largest theft of federal funds after Medicare/Medicaid and unemployment-insurance fraud. Tax-identity theft exploded to more than 1.1 million cases in 2011 from 51,700 in 2008. Link

* Former accountant wanted to play for higher stakes. Thomas Heath – The Washington Post opinion. The accountant-turned-real estate entrepreneur now owns shopping centers across the mid-Atlantic region, including Fredericksburg and Dulles Town Center in Sterling. He and his partners have also invested in distressed properties, with financing from a group of wealthy local families. Link

* Democrats behaving badly. Frank Bruni – The New York Times opinion. Democrat Sen. Harry Reid of Nevada took valid questions about Mitt Romney’s low tax bill and spun them into the unsubstantiated claim that Romney hadn’t paid any taxes for an entire 10-year period. Then he said the burden was on Romney to prove the charge untrue. Good thing our criminal courts don’t work that way. Link

By Patrick Temple-West, Reuters


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