Accounting News Roundup: Accounting and Auditing Reform; Levi’s Outsourcing; Dewey Have a Conspiracy? | 07.14.15

A Value-Added Tax Fuels Big Government [WSJ]
President Obama is now talking about a “balanced approach” to deficit reduction that includes a “revenue component” achieved by “tax reform.” Among the tax reforms getting attention is a value-added tax, or VAT. Similar to a sales tax […], the value-added tax has become a significant part of the revenue systems of Europe and also has been adopted by over 100 other nations. The VAT is believed to be a magical device that can stuff government coffers with money without untoward economic political consequences. It is no such thing.

The GOP will raise taxes — on the middle class and working poor [WaPo]
America’s presumably anti-tax party wants to raise your taxes. Come January, the Republicans plan to raise the taxes of anyone who earns $50,000 a year by $1,000, and anyone who makes $100,000 by $2,000. Their tax hike doesn’t apply to income from investments. It doesn’t apply to any wage income in excess of $106,800 a year. It’s the payroll tax that they want to raise — to 6.2 percent from 4.2 percent of your paycheck, a level established for one year in December’s budget deal at Democrats’ insistence. Unlike the capital gains tax, or the low tax rates for the rich included in the Bush tax cuts, or the carried interest tax for hedge fund operators (which is just 15 percent), the payroll tax chiefly hits the middle class and the working poor.

Biden Says He Didn’t Go to China ‘to Explain a Damn Thing’ About Economy [Bloomberg]
Some media had suggested the purpose of his trip to China was to “explain our economic situation,” Biden told U.S. troops at Yokota airbase in Japan today. “I didn’t come to explain a damn thing.”

Amtrak taps KPMG for fast-rail plan [BG]
Amtrak, the taxpayer-supported passenger railroad, has hired KPMG LLP to assist in developing a business and financial plan to have 220-miles-per-hour service between Washington and Boston by 2040. KPMG will lead a team of consultants that will help identify funding sources and maximize private investment, Amtrak said.

Iowa Priorities [Tax Update]
JK: “When Iowa really cares, it can move quickly.”

PwC US Appoints Dean Simone U.S. Risk Assurance Practice Leader [PwC]
Dean-o had been running both the Industrial Products and Risk Assurance prior to announcement.

America is GE’s tax haven [Reuters]
GE’s disclosures show that over the last decade it paid much lower tax rates in America than offshore, just the opposite of the Washington political mantra. Even more puzzling, the U.S. corporate giant chooses to take more of its profits in other lands despite the higher tax rates there. Given that GE […] has a roughly 1,000-person tax department dedicated to paying as little as possible in taxes, what the disclosures show is that something other than tax policy is driving GE’s business decisions.

~ Attention GC faithful, please let it be known that we’ll be on an abbreviated publishing schedule this week, with roundups, periodic updates and the occasional ranty rant from Adrienne. We still want to hear from you this week, so if anything worthy of these pages crops up, such as last-minute inventory assignments, holiday party pictures or Andrew Cuomo showing up at 5 Times Square demanding a snowball fight, email us the details.

Khodorkovsky Found Guilty of Oil Theft, Lawyers Say [Bloomberg]
A Moscow judge found Mikhail Khodorkovsky, the jailed former head of Yukos Oil Co., guilty of embezzling crude, adding to a 2005 conviction, in a trial that has raised European concerns about the rule of law in Russia. Khodorkovsky and his former business partner Platon Lebedev, already serving eight-year sentences for fraud and tax evasion, may be sentenced this week or after Jan. 10 when Russia’s New Year holidays end, their lawyers said. The men face six more years in prison, the defense team has said.

Northeast airports, roads shut down by blizzard [MSNBC]
Commuters and long-distance travelers across the Northeast faced snow drifts, stranded and crashed vehicles, as well as hundreds of canceled flights on Monday as a blizzard put a brutal end to the Christmas holiday weekend. New York City was especially hard hit. All three international airports have been closed since Sunday, forcing the cancellation of some 2,000 flights. Stranded travelers got cots and blankets but some said they were not allowed to retrieve their checked luggage and had no extra clothing or toiletries.

Rapper Trick Daddy took ‘Thug Holiday’ from IRS [Tax Watchdog]
“I’m a Thug” probably won’t work as an excuse for owing $157k.

Taking It Back – Santa [The Summa]
A video where Santa saves the accounting world. If you really use your imagination, that is.

AIG Secures New Credit Lines to Replace Fed Funding [WSJ]
American International Group Inc., which is preparing to repay its aid from the U.S. government, said it has obtained $4.3 billion in new credit lines from commercial banks to replace its funding from the Federal Reserve Bank of New York. The government-controlled insurer said it has established $3 billion in new bank credit facilities, split between a 364-day line and a three-year facility, under which banks have agreed to make loans to AIG. In addition, AIG’s property and casualty insurance subsidiary, Chartis Inc., entered into a one-year, $1.3 billion letter of credit facility.

If You Are Buying Fake Goods In London, It’s a Real Ripoff, Says KPMG [Big Four Blog]
Just London?