September 29, 2022

Accounting News Roundup: 9-9-9 > Optimal Tax; Businesses Hit By Tanning Tax Pales to Projections; PwC’s Lehman Haul | 10.14.11

How the Taxpayer Protection Pledge helps push tax reform [WaPo]
Red rover, red rover, send Grover right over: “The 238 members of the House of Representatives and the 41 senators who have signed the Taxpayer Protection Pledge to their constituents stand ready to vote for pro-growth, revenue-neutral tax reform that simplifies the tax code and brings rates down for all citizens and businesses. The pledge is a barrier to tax increases. And that protection makes real tax reform possible today, just as it did in 1986.”

Cain Plan’s Reagan-Era Roots [WSJ]
Herman Cain’s “9-9-9” plan might have been called the “Optimal Tax.” The Republican presidential candidate’s economic adviser, Rich Lowrie, thought the plan’s broad sweep and ultra-low 9% rates made it an ideal tool to revamp the tax code and encourage growth. Mr. Cain liked the idea, but not the name Mr Lowrie came up with. “We can’t call it that,” Mr. Cain said during a cab ride through Nashville in July, according to Mr. Lowrie. Instead, the former pizza-chain executive, tapping his instinct for marketing, concluded: “We’re just going to call it what it is: 9-9-9.” (“What kind of nerd am I?” Mr. Lowrie says now.)

Can Tax Cuts Pay for Themselves? [NYT]
Can tax cuts “pay for themselves,” inducing so much additional economic growth that government revenue actually increases, rather than decreases? The evidence clearly says no. Nevertheless, a version of this idea, under the guise of “dynamic scoring,” has apparently surfaced in the supercommittee charged with deficit reduction — the joint Congressional committee with 12 members. Dynamic scoring sounds technical or perhaps even scientific, but here the argument means simply that any pro-growth effect of tax cuts should be stressed when assessing potential policy changes (e.g., reforming the tax code). For anyone seriously concerned with fiscal responsibility, this is a dangerous notion.

Bethenny Frankel’s $120 Million Skinnygirl Lie That Wasn’t [Fraud Files]
Tracy Coenen debunks a HuffPo wannabe debunker.

TIGTA: 10,300 Businesses (Not Projected 25,000) Paid 10% ObamaCare Tanning Tax [TaxProf]
New Jersey, rejoice!

Tax Holiday Backers Emphasize Big Picture [Bloomberg]
Faced with criticism that companies didn’t use proceeds of a 2004 tax holiday to create jobs directly, advocates for repeating the policy are emphasizing the indirect economic effects of repatriating more than $1 trillion. Whether the money is used for hiring or stock buybacks, “I would much rather have their foreign earnings here rather than in, say, France,” said Kenneth Kies, a tax lobbyist at the Federal Policy Group in Washington whose clients include Microsoft Corp. (MSFT) and Pfizer Inc. Those companies, along with Apple Inc., Google Inc., and Qualcomm Inc., are part of a coalition urging Congress to temporarily reduce the tax rate on profits held overseas. They want a repeat of a 2004 law that let companies pay 5.25 percent, instead of 35 percent, when they bring that cash to the U.S.


PwC has earned £400m from Lehman Brothers so far [Telegraph]
In total, the accountancy firm has billed Lehman Brothers International (Europe) £403m and still has about 250 staff working on the complex resolution of the bank. This fee does not take into account the cost of continuing to pay 495 former Lehman Brothers staff as well as contractors who are helping with the winding up work. In the six months to the end of June alone the payroll bill came to £33m. Completing the work is expected to take at least 10 years, though the costs are expected to fall as the main parts of the administration are completed and the number of staff required to work on the project falls. An application will be made to the UK High Court next month to extend the administration period for a further five years.

ICAEW: Pass/fail audit report is best [Accountancy Age]
Auditors’ Reporting model should not be extended to disclose company information that is not already in the public domain, the ICAEW has argued. US regulator the PCAOB has proposed extending the audit report template to offer investors more detail on risks and business models, but the ICAEW has warned if management has not disclosed the information, the auditor should not do so.

How the Taxpayer Protection Pledge helps push tax reform [WaPo]
Red rover, red rover, send Grover right over: “The 238 members of the House of Representatives and the 41 senators who have signed the Taxpayer Protection Pledge to their constituents stand ready to vote for pro-growth, revenue-neutral tax reform that simplifies the tax code and brings rates down for all citizens and businesses. The pledge is a barrier to tax increases. And that protection makes real tax reform possible today, just as it did in 1986.”

Cain Plan’s Reagan-Era Roots [WSJ]
Herman Cain’s “9-9-9” plan might have been called the “Optimal Tax.” The Republican presidential candidate’s economic adviser, Rich Lowrie, thought the plan’s broad sweep and ultra-low 9% rates made it an ideal tool to revamp the tax code and encourage growth. Mr. Cain liked the idea, but not the name Mr Lowrie came up with. “We can’t call it that,” Mr. Cain said during a cab ride through Nashville in July, according to Mr. Lowrie. Instead, the former pizza-chain executive, tapping his instinct for marketing, concluded: “We’re just going to call it what it is: 9-9-9.” (“What kind of nerd am I?” Mr. Lowrie says now.)

Can Tax Cuts Pay for Themselves? [NYT]
Can tax cuts “pay for themselves,” inducing so much additional economic growth that government revenue actually increases, rather than decreases? The evidence clearly says no. Nevertheless, a version of this idea, under the guise of “dynamic scoring,” has apparently surfaced in the supercommittee charged with deficit reduction — the joint Congressional committee with 12 members. Dynamic scoring sounds technical or perhaps even scientific, but here the argument means simply that any pro-growth effect of tax cuts should be stressed when assessing potential policy changes (e.g., reforming the tax code). For anyone seriously concerned with fiscal responsibility, this is a dangerous notion.

Bethenny Frankel’s $120 Million Skinnygirl Lie That Wasn’t [Fraud Files]
Tracy Coenen debunks a HuffPo wannabe debunker.

TIGTA: 10,300 Businesses (Not Projected 25,000) Paid 10% ObamaCare Tanning Tax [TaxProf]
New Jersey, rejoice!

Tax Holiday Backers Emphasize Big Picture [Bloomberg]
Faced with criticism that companies didn’t use proceeds of a 2004 tax holiday to create jobs directly, advocates for repeating the policy are emphasizing the indirect economic effects of repatriating more than $1 trillion. Whether the money is used for hiring or stock buybacks, “I would much rather have their foreign earnings here rather than in, say, France,” said Kenneth Kies, a tax lobbyist at the Federal Policy Group in Washington whose clients include Microsoft Corp. (MSFT) and Pfizer Inc. Those companies, along with Apple Inc., Google Inc., and Qualcomm Inc., are part of a coalition urging Congress to temporarily reduce the tax rate on profits held overseas. They want a repeat of a 2004 law that let companies pay 5.25 percent, instead of 35 percent, when they bring that cash to the U.S.


PwC has earned £400m from Lehman Brothers so far [Telegraph]
In total, the accountancy firm has billed Lehman Brothers International (Europe) £403m and still has about 250 staff working on the complex resolution of the bank. This fee does not take into account the cost of continuing to pay 495 former Lehman Brothers staff as well as contractors who are helping with the winding up work. In the six months to the end of June alone the payroll bill came to £33m. Completing the work is expected to take at least 10 years, though the costs are expected to fall as the main parts of the administration are completed and the number of staff required to work on the project falls. An application will be made to the UK High Court next month to extend the administration period for a further five years.

ICAEW: Pass/fail audit report is best [Accountancy Age]
Auditors’ Reporting model should not be extended to disclose company information that is not already in the public domain, the ICAEW has argued. US regulator the PCAOB has proposed extending the audit report template to offer investors more detail on risks and business models, but the ICAEW has warned if management has not disclosed the information, the auditor should not do so.

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