Ed. note: Just a reminder that we're taking it easy this week, so posting will be on the light side. News roundups, breaking news, etc. If you see anything newsworthy, email us or drop it in Open Items for discussion.
For the Wealthiest, a Private Tax System That Saves Them Billions [NYT]
Part of me feels like I've read this article before: rich people avoid taxes, lots of taxes, through lobbying for political influence and sophisticated planning. Non-rich people cannot. Specifically, this article mentions reinsurers that are often used by hedge funds, but also "family offices" whose core function is tax avoidance. And the worker bees in those family offices seem to enjoy themselves:
Among tax lawyers and accountants, “the best and brightest get a high from figuring out how to do tricky little deals,” said Karen L. Hawkins, who until recently headed the I.R.S. office that oversees tax practitioners. “Frankly, it is almost beyond the intellectual and resource capacity of the Internal Revenue Service to catch.”
Not only is the IRS hapless, but at its core, tax avoidance boils down to moving income into classifications with lower tax rates or no rates at all, e.g. long-term capital gains or unrealized appreciation. The wealthy go to great lengths to find these lower rates, no matter where they are — Ireland, Caymans, etc. And as long as income is the basis for our tax system it will be very, very difficult to change that.
Apple Said to Pay $348 Million in Italian Taxes to Settle Claim [Bloomberg]
Speaking of tax avoidance, this settlement was for the entire amount that Italy sought to recover from Apple "after ruling that Apple booked 880 million euros in profits to an Irish subsidiary from 2008 to 2013."
Post-Grad Accounting Degrees on the Rise: The Big Number [WSJ]
We've covered the role of master's degrees in the accounting world ad nauseum so it's a little odd that the Wall Street Journal is just now noticing:
Master’s degrees in accounting earned in 2013-14 totaled 27,359, up from 20,843 a year earlier. By contrast, the number of bachelor’s degrees in accounting fell 11% to 54,423.
One factor in the rising number of master’s degrees may be a 2014 requirement that certified public accountants complete 150 hours of academic work for certification. “More students are recognizing that, in most cases, the additional academic work needed to acquire the technical competence and develop the skills required by today’s CPA is best obtained at the graduate level,” said Joanne Fiore, AICPA’s vice president for professional media, pathways and inclusion.
The explanation is simple: it's the slowest news week of the year. The article doesn't mention the trend of fewer graduates sitting for the CPA exam so maybe we'll see that story in another 52 weeks.
In other news:
- Joe Kristan shares what needs to be paid by tomorrow (for tax purposes).
- Champagne taxes.
- Reining in “Non-GAAP Financial Measures”
- How Much Is Too Much Self-Promotion At Work
- Diocese Punishes Priest Who Used Hoverboard During Mass