October 1, 2022

Accounting News Roundup: Romney’s Taxes Are Front and Center; Bernanke Declines Tax Cut Bait; Comparing Candidates’ 1040s | 01.26.12

Talk of Taxing the Rich More Faces Political Realities [NYT]
Democrats promised Wednesday that this time their calls for serious tax changes for the rich were serious. For two years, when their party controlled both houses of Congress and the White House, Democratic leaders failed to change the rules on “carried interest” to ensure that private equity titans and venture capitalists pay more than a 15 percent tax rate on fees reaped from their investor clients. Democrats hardly mentioned raising the 15 percent tax rates on dividends and capital gains, the largest reason the super-rich pay less of their income in taxes than many middle-class families. But that was before Mr. Romney released a 2010 tax return that showed income of $21.6 million, and an effective tax rate of 13.9 percent, a rate more typical of a household earning about $80,000. An Individual Retirement Account with significant investments in the Cayman Islands valued at $20 million to $100 million, along with investments scattered in tax havens from Switzerland to Luxembourg to Ireland, has also provoked scrutiny. “All you need to do is look at the former governor of Massachusetts’ tax return to understand why this has become an emergency,” Senator Harry Reid, the Nevada Democrat and majority leader, said Wednesday, referring to Mr. Romney.

Bernanke doesn't take the bait on payroll tax cut [The Hill]
Bernanke told reporters that he preferred not to wade too deeply into the legislative process, after being asked about the economic impact of both not extending the payroll tax cut and not implementing the automatic $1.2 trillion in spending cuts triggered by the failure of the congressional supercommittee. Instead, the Fed chairman leaned on advice he’s made to lawmakers before, saying Congress needs to get its fiscal house in order but in a way that does not damage the still-delicate economy. “We need at this juncture to be sensitive to the effects of whatever policy decisions are made on what is still a very fragile recovery,” Bernanke said at one of his now regular news conferences. “Again, there are many ways to do that, but I think that should be taken into account as people are looking at policy alternatives in terms of taxes or spending.”

IRS Should End Commodity Mutual-Fund Runaround, Levin Says [Bloomberg]
U.S. tax authorities should stop a private rulemaking process that has encouraged speculation in oil and agricultural markets by letting mutual funds exceed limits on commodity investments, Senator Carl Levin said. The Internal Revenue Service’s so-called private letter rulings, which let funds use foreign corporations and other strategies to escape the tax implications of boosting commodity holdings above 10 percent of assets, are a “runaround” of the law that reflects a “tortured reading,” Levin said at a news conference yesterday. The IRS has issued more than 70 such rulings since 2006, according to Levin, a Michigan Democrat who leads the Senate’s Permanent Subcommittee on Investigations, and Senator Tom Coburn of Oklahoma, the panel’s top Republican. Levin, who briefed reporters ahead of a hearing today, said the IRS should permanently ban the practice and revoke the existing rulings.

Tales of the 1040s [WaPo]
It looks like Newt Gingrich could use a new tax adviser.
 
Joe Paterno's estate tax mistake [DMWT]
Did the man do nothing right?
 
Jon Stewart on Mitt Romney's Tax Returns [CC via TaxProf]

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