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December 6, 2022

Accounting News Roundup: The Internet’s Protest; More on Romney’s Taxes; Nortel’s Cookie Jar | 01.18.12

Politics, Tax Code Said to Stymie U.S. [WSJ]
According to Harvard Business School graduates, political gridlock, faltering schools, and a convoluted tax code are making American companies less competitive in the global marketplace. A new survey of the business school's alumni found that nearly three-quarters of respondents expect the U.S. to be less competitive over the next three years. They said the U.S. is losing ground to emerging economies, where low wages, increasingly skilled workers, growing markets and proximity to customers frequently trump traditional American strengths such as sophisticated infrastructure, a reliable legal system and effective macroeconomic policy.

Parties Confident of Extending Payroll Tax Cut [NYT]
With both parties largely in agreement on a yearlong extension of President Obama’s payroll tax cut, the fight in Congress over the coming weeks will boil down to how to pay for it, and Democrats appeared to hold the advantage as members of the House returned to Washington on Tuesday. Senior Democratic aides say they are entering the tax negotiations in a strong position after House Republicans yielded to bipartisan political pressure and passed a two-month extension of the two-percentage-point payroll tax cut just before the winter break.

Wikipedia, Google Go Black to Protest SOPA [WSJ]
Wikipedia and other popular websites converted their homepages into virtual protest banners early Wednesday as part of an effort to stop Internet piracy legislation that is being considered by the U.S. Congress. The online encyclopedia, the tenth most popular website in the U.S., shut down most of its English-language services and replaced its familiar white and gray design with a black homepage featuring information about the bills. Known as the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA), the legislation—backed by major American media companies—would allow the Justice Department to seek a court order requiring U.S. search engines to scrub certain results from the sites, among other antipiracy measures. "This bill is poorly constructed, quite dangerous and won't actually address the real problem of piracy," said Jimmy Wales, the co-founder of Wikipedia, in an interview. "Internet policy shouldn't be set by Hollywood."

Capital Gains: Romney and the 1% [Economix/NYT]
The rich earn far more from capital gains than everyone else. The percentages fluctuate from year to year, but in 2007, the top 1 percent of earners received 20 percent of their income from capital gains, while everyone else received, on average, 2 percent of their income from capital gains. In 2011, according to estimates by the nonpartisan Tax Policy Center, the top 1 percent paid 70 percent of the total federal tax on capital gains. The center also estimates that the top 1 percent, of which Mr. Romney is a member, pays an effective income tax rate of 18.5 percent, compared to 9.5 percent for the population as a whole. But when it comes to payroll taxes, the rich pay a far lower effective rate than everyone else – 1.7 percent compared to 7 percent – because the income subject to payroll taxes is capped at $107,000.

Mitt Romney, (accidental) class traitor? [Wonkblog/WaPo]
Ezra Klein: "[I]f I were a rich investor paying 15 percent every year, I would be a bit peeved at Romney for running for president in the first place. We had a good thing going, man! Most people think the tax code is, on the whole progressive. They know there are higher marginal rates than the ones they pay. And most people don't spend much time thinking about the implications of the fact that many of the richest Americans in the country make their money through investments rather than wages."

Nortel executives shifted accounting funds to achieve results: Crown [GM]
Nortel Networks Corp. executives knew as early as the fall of 2002 that they were facing losses in the first half of 2003, but manipulated accounting reserves to ensure a profit in the period so they could trigger their “return to profitability” bonus payments, a Toronto court heard Tuesday. In his opening statement in the fraud trial of three former Nortel executives, Crown attorney Robert Hubbard said the executives even turned an unexpected profit into a loss in the final quarter of 2002 because it came too early to trigger their bonuses. “Contrary to Nortel’s own policy for closing its books, senior executives solicited further [accounting] accruals from across the company to turn a profit into a loss,” Mr. Hubbard told Mr. Justice Frank Marrocco of the Ontario Superior Court.

Congress’s gift shops losing money [The Hill]
Sitting forlornly on the shelves were the $18 U.S. Capitol stoneware mugs, $16 T-shirts and 5-inch replica of the Senate’s Ohio Clock, which retails for $120. No one was buying the $55 George Washington platter, either.

How to Lower Your Workplace Stress [WSJ]
You know, if you've got any.

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