Accounting News Roundup: IFRS Can Overcome; Will the Payroll Tax Come Back from the Dead?; Keep Your Sickness at Home | 10.24.12

Posted on by Caleb Newquist

Starbucks finance chief denies tax claims [FT]
Starbucks has admitted a quarter of its 600 UK-owned stores are running at a loss, in a rebuttal of accusations of tax avoidance, blaming its low corporate tax payments on overexpansion. In an interview with the Financial Times, Troy Alstead, chief financial officer of the global coffee chain, said: “I look forward to the day when we pay a lot more tax … we have had a long history, unfortunately and in the early days, of aggressive expansion. We did a little bit of a land grab and we made a lot of mistakes.”

IFRS Foundation report says SEC’s concerns can be overcome [JofA]
A slightly more positive narrative than yesterday's reports.
 
Democrats say they are open to extension of payroll tax holiday [The Hill]

[W]ith the economic recovery puttering along, prominent Democrats like Larry Summers and Rep. Chris Van Hollen (Md.) are suggesting that the party rethink that approach — even as they continue to stress that the tax cut remains nothing more than a temporary measure. “I always thought that talk of payroll being completely sunsetted was a bit premature,” a Senate Democratic aide told The Hill this week. That shift on the Democratic side could add even more uncertainty as Washington tries to deal with the looming spending cuts and tax increases known as the “fiscal cliff” after the election.  Ending the 2-percentage-point cut in the payroll tax had appeared to be a rare part of the cliff that top Democrats and Republicans agreed on. But lobbyists and aides on Capitol Hill say there might be good political reason for Democrats to push for a third year of the holiday, as it could give them another political chip in what could be protracted fiscal-cliff talks.
 
VW net profit up 58 percent on accounting gain [BBW]
Volkswagen group net profit rose to €11.38 billion ($14.8 billion) from €7.14 billion in the same quarter last year, strongly boosted by gains from the complex deal that made Porsche one of VW's 12 brands. Global sales rose 27 percent to €48.84 billion. Analysts at Sanford C. Bernstein have said the non-cash gain from the complex Porsche deal would be around €7 billion in the quarter, citing guidance from company officials. It involves re-valuing options and how the Porsche stake is accounted for on Volkswagen's books. Operating earnings — excluding financial items such as interest and taxes, as well as the effects of the merger — fell 19 percent to €2.34 billion from €2.89 billion.

Become "Rich" Simply by Saying "I Do" [Tax Foundation]
Worst marriage advice ever.

The Art of Calling In Sick—Or Not [WSJ]
Staying in bed poses a risk of falling behind or being seen as a slacker. But showing up sick, and grossing out or infecting colleagues, can be worse, and a growing number of employers are setting policies to discourage it. "People get really, really ticked off at co-workers spreading germs in the workplace. There's nothing worse than being Typhoid Mary," says Annie Stevens, a managing partner at ClearRock, a Boston leadership-development and career-transition consultant.

Dog Poo Predicts Presidential Win [HP]
Jim Coniglione is the owner of Scoopy Doo, a dog poop collection service in Long Island, N.Y., and he predicts a win for Romney for a very peculiar reason: The majority of dog poop he's picking up looks like the former Massachusetts governor. "I think it's because of the economy. People are giving their dogs cheaper dog food and the dogs are producing more 'product,' and that looks more like Romney," Coniglione told The Huffington Post.

 

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Accounting News Roundup: Arguing Against a VAT; KPMG to Advise on Amtrak Expansion; USA: Tax Haven? | 08.24.11

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.