Accounting News Roundup: Fake Financial News and Tax Reform Bullet Points | 04.27.17

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Fake financial news

The AICPA is worried about fake news, everyone. No, really! Fake financial news to be precise. Here’s an anxious press release from this morning regarding a recent survey commissioned by the AICPA that found all sorts of people are making a lot of rash financial decisions:

The risk of making an impulsive financial decision in reaction to a headline or article that may be designed to mislead has the potential to cause serious problems. Acting hastily does not allow the proper time to think a decision through and weigh the long and short-term financial implications. However, more than 3-in-4 (77 percent) Americans feel it’s important to act fast to make financial decisions when breaking financial news becomes available, with 40 percent saying it’s very important to act quickly. That’s according to a new telephone survey of 1,018 adults conducted in March 2017 for the American Institute of CPAs (AICPA) by Harris Poll in support of National Financial Capability Month.

I think the takeaway here is that lots of people are bad at managing their money. The AICPA didn’t put it quite that harshly, however:

“Having accurate, reliable financial information is the basis for deliberate and rational decision making,” said Greg Anton, CPA, CGMA, and chair of the AICPA’s National CPA Financial Literacy Commission. “With few exceptions, making snap financial decisions is usually not a good idea. There is a fine line between reacting and overreacting, and Americans should proceed cautiously until they’re able to parse the facts.”

If there’s one thing Americans do incredibly well, it’s overreacting. In the near future, I’m certain we’ll hear stories about people cashing out their 401ks after reading articles about the New York Stock Exchange changing its rules to conform with sharia-compliant finance.

How’s tax reform coming along?

Yesterday, Treasury Secretary Steven Mnuchin and Director of the National Economic Council Gary Cohn held a press conference to talk about the Trump Administration’s tax reform plan. Did I say plan? It was more like an over-caffeinated child’s Christmas wish list, as reporters were handed a single sheet of bullet points that explained virtually nothing about how the plan would be paid for, which leaves the economists with nothing to do. And if it sounds like Treasury whipped this together in a frenzy, that’s because they did!

If the one-page outline seemed hastily assembled, it was. Some Treasury officials found out that a plan would be made public Wednesday only after Trump announced his intentions last Friday, promising “massive” tax cuts. The Treasury staffers and counterparts from the White House then rushed to prepare a presentation with enough viable talking points to satisfy Trump’s expectations, while keeping it open-ended enough to leave room for further consideration, said a person familiar with the matter who asked not to be named because the discussions were private.

Some of the things on the wish-list-that-is-definitely-not-a-plan include: 1) 3 tax brackets for individuals; 2) Preserving the mortgage interest and charitable contribution deductions but not the state and local tax deduction; 3) Repealing the estate tax and the AMT; 4) 15% tax rate for pass-through entities; 5) Doubling the standard deduction.

As usual, your required reading on this topic is Richard Rubin’s reporting in the Wall Street Journal and Tony Nitti’s Twitter feed. I’d also recommend Binyamin Appelbaum’s Twitter feed.

However, if you don’t have time for all that, this Upshot column in the New York Times puts the winners and losers into, yep, bullet points.

Has Donald Trump released his tax returns?

Nope! Also during this tax reform hype sesh, Steve Mnuchin shot the possibility down:

“The president has released plenty of information and I think has given more financial disclosure than anybody else. I think the American population has plenty of information,” he said, inaccurately characterizing the president’s disclosures.

Isn’t it nice that people have finally quit pretending?

Previously, on Going Concern…

Greg Kyte gave the unsung SEC whistleblowers some credit in his Exposure Drafts cartoon. In Open Items, someone with a JD is wondering about roles with EY or PwC.

In other news:

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