October 1, 2022

Accounting News Roundup: Hooray for Trains; Who Wins Under Romney’s Tax Plan?; Just *Try* to Imagine Life Without CPAs | 11.01.12

Subway, Rails to Inch Back Into Service [WSJ]
New York City subway service will resume only partly Thursday morning, and residents braced for the prospect that the new day's commuting through the five boroughs and nearby suburbs would be even more grueling than the day before. The Metropolitan Transportation Authority planned to restart parts of 14 subway lines at 6 a.m. Thursday. But there would be no service through the core area damaged by floodwaters from Sandy: Manhattan below 34th Street, the Brooklyn shoreline and the tunnels linking the two for more than a century.

The Winners and Losers Under Romney’s Tax Plan [DealBook]
Mr. Romney has indicated that the plan is revenue-neutral, raising as much revenue as current law. He has also said it is “distributionally neutral” — meaning that the rich, middle class and poor would all continue to bear the same aggregate tax burden as they do now. The idea seems to be that lowering tax rates would spur economic growth, and the reduction in revenue from lowering rates would be at least partly offset by increased revenue through limitations on deductions, credits and exclusions. In recent weeks, the focus has been on whether the math “works” in the sense of whether cutting deductions for the wealthy would actually generate enough revenue to finance the proposed rate cuts. The implication, based on a study by the Tax Policy Center, is that in order to remain revenue-neutral, the middle class would have to share the pain of limited deductions. That would effectively shift the tax burden from the rich to the middle class and violate the stated goal of distribution neutrality.

Looming Tax Hike Motivates Owners to Sell [WSJ]
Many business owners—mostly founders who could gain a lot from a sale—are looking to close deals before next year, when the maximum tax on investment income is scheduled to rise from 15% currently to at least 23.8% on most capital gains, at least for higher-income households. Many sellers intend to convert their equity into retirement funds or just start anew. "It just made more sense for me to take my chips off the table and go do something else," said Bert Wolf, 60 years old, who has an agreement to sell his compressed-gas business, Acetylene Oxygen Co. of Harlingen, Tex., before year-end. Mr. Wolf added that if he waited until after the tax increase to sell, he would have to expand the business at the current rate "for at least 3 or 4 more years to achieve the same after-tax sales dollar."

Would Prop. 30 really drive millionaires out of California? [LAT]
A counterpart to the biblical adage that the poor will always be with us is the notion that the rich will always be one tax hike away from leaving us. That's the foundation stone, after all, of the argument against raising taxes on "job creators" and of bestowing preferential treatment on capital gains (largely collected by the rich) over wage income (the sustenance of us other poor slobs). And it's a linchpin of the campaign against Proposition 30, Gov. Jerry Brown's proposal to raise income taxes on income above $250,000, topping out at a 13.3% rate on income over $1 million. Go after the wealthy like that, the argument goes, and the rich will flow out of the state like rainwater cascading down a sewer grate. It's refreshing, therefore, to see some hard data on the issue, and illuminating to learn what it tells us, which is: Not so.

The World Without CPAs [MACPA]
I CAN'T BEAR THE THOUGHT.

Top Ten Ways To Smash A Pumpkin [HP]
If you're not into whole composting thing.

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