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Accounting News Roundup: SarbOx’s Clawbacks Disappoint;Tax Credits Boost Video Game Industry; Ex-E&Y Partner’s Conviction Sticks | 09.12.11

Clawbacks Without Claws [NYT]
Under the Sarbanes-Oxley Act of 2002, the Securities and Exchange Commission was encouraged to hit executives where it hurts — in the wallet — if they certified financial results that turned out to be, in a word, bogus. SarbOx was supposed to keep managers honest. They would have to hand back incentive pay like bonuses, even if they didn’t fudge the accounts themselves. That, anyway, was the idea.

At 9/11 ceremonies, tearful storytelling and still-vivid memories [WaPo]
The anniversary of the attacks — the first since the killing in May of Osama bin Laden — unfolded through tearful storytelling and still-vivid memories. Political and religious leaders urged the nation to recall the spirit of common purpose that defined that day and its immediate aftermath but which has faded amid the acrimonious debate over America’s response to the attacks and the effect that response has had on the nation’s politics, finances and values.

How to Make Business Want to Invest Again [NYT]
According to a 2008 study by the Organization for Economic Cooperation and Development, “Corporate taxes are found to be most harmful for growth.” Tax reform that reduced the burden on capital income and shifted it toward consumption would improve prospects for long-run growth and, in so doing, encourage greater investment today. Yet it would be overly optimistic to think that any single public policy, by itself, could lead to the kind of robust investment spending seen in previous recoveries. Myriad government actions influence the expected future profitability of capital. These include not only policies concerning taxation but also those concerning trade and regulation.

Capital gains tax rates benefiting wealthy feed growing gap between rich and poor [WaPo]
For the very richest Americans, low tax rates on capital gains are better than any Christmas gift. As a result of a pair of rate cuts, first under President Bill Clinton and then under Bush, most of the richest Americans pay lower overall tax rates than middle-class Americans do. And this is one reason the gap between the wealthy and the rest of the country is widening dramatically.

Rich Tax Breaks Bolster Makers of Video Games [NYT]
The United States government offers tax incentives to companies pursuing medical breakthroughs, urban redevelopment and alternatives to fossil fuels. It also provides tax breaks for a company whose hit video game this year was the gory Dead Space 2, which challenges players to advance through an apocalyptic battlefield by killing space zombies. Those tax incentives — a collection of deductions, write-offs and credits mostly devised for other industries in other eras — now make video game production one of the most highly subsidized businesses in the United States, says Calvin H. Johnson, who has worked at the Treasury Department and is now a tax professor at the University of Texas at Austin.

Westchester accountant pleads to tax charge in NYC [AP]
A Westchester County accountant has pleaded guilty to securities fraud, admitting cheating a dozen investors of more than $2 million. Laurence Brown entered the plea in federal court in Manhattan on Thursday. The 64-year-old Katonah, N.Y., resident faces up to 70 years in prison at a Nov. 17 sentencing. Prosecutors said Brown and a business partner carried out the fraud from 2008 to June 2010 by promising that investors’ money would be spent to upgrade a natural gas pipeline in Tennessee.

Ex-E&Y partner’s insider trading conviction upheld [Reuters]
A U.S. court upheld an insider trading conviction of a former partner at accounting firm Ernst & Young LLP, even though the trial judge failed to instruct jurors on a valid defense he had to securities fraud charges. The 2nd U.S. Circuit Court of Appeals in New York on Friday said the defendant James Gansman did not deserve a new trial because he was not prejudiced by the slightly different jury charge given by his trial judge. It also turned aside several other issues raised in the appeal.

‘We Need More Dogs. We Don’t Need No Cats’ [TaxProf]
I have no idea why the TaxProf posted this but I’m glad he did.

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