Author: Caleb Newquist

Obama, taxes and the ‘Buffett Rule’ [Fact Checker/WaPo]
Still, there are so many numbers tossed around about taxes that it seems a good time to take a step back and look at the data. After all, Republicans frequently note that 50 percent of Americans pay no income taxes. So how is it that Democrats can complain that billionaires are paying a lower tax rate than their secretaries? And does the so-called “Buffett Rule” make sense as tax policy?

GOP Leaders Urge the Fed Not to Act [WSJ]
Top Republican congressional leaders, in a rare effort to directly influence Federal Reserve policy, expressed reservations about the central bank taking additional steps to spur the recovery, saying further action could harm the economy. House Speaker John Boehner (R., Ohio), Senate Minority Leader Mitch McConnell (R., Ky.), and two other GOP leaders, in a letter Monday to Fed Chairman Ben Bernanke, urged Fed officials to “resist further extraordinary intervention in the U.S. economy.” The four lawmakers wrote that it wasn’t clear the Fed’s earlier attempts to support the economy through large purchases of government bonds, called quantitative easing, had “facilitated economic growth or reduced the unemployment rate.” They said those efforts had likely increased economic uncertainty.

S.E.C. Hid Its Lawyer’s Madoff Ties [NYT]
After Bernard L. Madoff’s giant Ponzi scheme was revealed, the Securities and Exchange Commission went to great lengths to make sure that none of its employees working on the case posed a conflict of interest, barring anyone who had accepted gifts or attended a Madoff wedding. But as a new report made clear on Tuesday, one top official received a pass: David M. Becker, the S.E.C.’s general counsel, who went on to recommend how the scheme’s victims would be compensated, despite his family’s $2 million inheritance from a Madoff account.

Politicians dodge the details in US tax debate [FT]
Democrats and Republicans have claimed that reforming America’s outdated tax system is at the forefront of their respective agendas on Capitol Hill, but politicians on both side of the aisle are playing a subtle game of chicken that may undermine the chances for change.

HRBN: The Annals of Fraud [The Financial Investigator]
Roddy Boyd: “Harbin has made up tens of millions of dollars of annual revenue and receivables for several years running, according to assertions made in a pair of interviews with the senior management of Jiangsu Liyang, a company that Harbin has asserted in its 10-Ks is one of its best customers.”

Minimalist workspace [ABD]
Too much clutter?

U.S. Alleges Poker Site Stacked Deck [WSJ]
As professional poker players, Howard Lederer, Chris Ferguson and Rafael Furst got rich by bluffing players out of their money in televised tournaments. Now, the U.S. government alleges that they and their colleagues used this same approach in running one of the world’s largest online poker sites. On Tuesday, the U.S. Justice Department in a civil suit accused Messrs. Lederer, Ferguson and Furst, and another director of the company behind the Full Tilt Poker website, of defrauding thousands of online poker players out of more than $300 million that is still owed to them. The government said that, in total, the 23 owners of the site had taken out $444 million in distributions over the years.

A Tax Others Embrace, U.S. Opposes [NYT]
President Obama’s proposal for a new tax on millionaires echoes a call in many countries struggling with budget deficits and overwhelming debts to make the wealthy pay more. Britain and France have imposed new taxes on their highest earners — and Italy, Spain, Greece and Japan are considering similar moves, despite some protests. Whether the taxes on the rich in Europe raise enough money to close much of their budget shortfalls, they are being promoted as a step toward economic fairness at a time when governments are cutting spending on social programs like pensions, health care and education.

A $16 muffin? Justice Dept. audit finds ‘wasteful’ and extravagant spending [WaPo]
Justice Department auditors also criticized a $76-per-person lunch at a conference at a Hilton in San Francisco, featuring slow-cooked Berkshire pork carnitas, hearts-of-romaine salad — and coffee at $8.24 a cup.

In close race for No 1, Deloitte, PwC grow apace [Reuters]
The world’s two largest accounting and consulting firms are bulking up with acquisitions and combing the globe for new hires. Head-to-head in a race for the title of world’s largest private professional services firm, Deloitte and PwC are on a major expansion drive. With audit revenues leveling off in developed markets, the firms have been making a push in growing countries such as China and India and plowing ahead with investments in consulting, where business is growing after a recessionary slump. More is at stake than bragging rights. Just as important is cementing tssional service supermarkets, able to help clients in almost any market where commerce transpires.

Obama offers stark choice to Republicans [FT]
Barack Obama has laid out a stark choice to Republicans that he will take to voters in next year’s presidential election, saying that their policies would starve health and education of funds unless they agreed to higher taxes on the wealthy. In a speech on Monday, Mr Obama said the principle that wealthy Americans earning more than $1m a year should not pay a lower tax rate than that levied on middle class incomes was at the heart of his deficit reduction programme. However, the president did not provide any details on how to meet what the White House is calling the “Buffett rule”, named after the billionaire Warren Buffett’s assertion that his tax rate was lower than his secretary’s.

‘Buffett Rule’ for Millionaire Tax Seen as Easier Said Than Done [Bloomberg]
For now, the Buffett rule is less of a concrete legislative proposal and more of a political talking point that has elicited Republican cries of “class warfare.” Democrats defended the idea and urged Congress to adopt it in designing a new tax system. “We’re not going to give the Congress a detailed proposal for how to meet that principle because we think there are a bunch of different ways to do that,” said Treasury Secretary Timothy Geithner, adding that the details of the rule would depend on the rest of the structure of a revamped tax code.

‘Angry Birds’ May Slingshot Into Starbucks [Bloomberg]
Rovio, whose smartphone game has been downloaded more than 350 million times, is in discussions with Starbucks about in- store promotions, Wibe Wagemans, a senior vice president at the Espoo, Finland-based company, said in an interview. Rovio may offer virtual goods and set up electronic leader boards in stores to tout top-scoring “Angry Birds” players.

The Netflix to Qwikster Shift Smells More Like Creative Accounting than a Good Business Move [FC]
When Netflix announced that they were separating their mail and streaming services into two different companies, there was a lot of effort put into focusing attention on the mistakes they made recently rather than the future of the companies. While it makes for great sound bytes and headlines, was it done in a way to hide their true intentions?

California to tax scofflaws: Pay up or lose your driver’s (or CPA) license [AWEB]
The California State Assembly has approved Assembly Bill 1424, the Delinquent Taxpayer Accountability Act, aimed at the state’s worst tax debtors. The bill delivers a clear message: pay your back taxes or we’ll suspend your driver’s license and/or professional licenses.

Obama’s debt-reduction plan: $3 trillion in savings, half from new tax revenue [WaPo]
President Obama will announce a proposal on Monday to tame the nation’s rocketing federal debt, calling for $1.5 tue as part of a plan to find more than $3 trillion in budget savings over a decade, senior administration officials said.

The proposal draws a sharp contrast with Republicans and amounts more to an opening play in the fall debate over the economy than another attempt to find common ground with the opposing party. Combined with his call this month for $450 billion in new stimulus, the proposal represents a more populist approach to confronting the nation’s economic travails than the compromises he advocated earlier this summer.

Obama Tax Plan Would Ask More of Millionaires [NYT]
Mr. Obama, in a bit of political salesmanship, will call his proposal the “Buffett Rule,” in a reference to Warren E. Buffett, the billionaire investor who has complained repeatedly that the richest Americans generally pay a smaller share of their income in federal taxes than do middle-income workers, because investment gains are taxed at a lower rate than wages.

Rep. Ryan: ‘Buffett Rule’ an example of ‘class warfare’ [OTM/The Hill]
“You tax something more, you get less of it,” Ryan said. Obama is trying to “raise the tax on capital,” he said.

UBS says trader hid loss with fake deals [FT]
Kweku Adoboli, the trader charged with blowing a $2.3bn hole in the books of UBS, allegedly disguised huge lossmaking positions with fictitious counter-trades, the bank has stated, the same tactic used by Jérôme Kerviel who caused €4.9bn of losses at France’s Société Générale in 2008. As one senior UBS executive likened the trading scandal to “a terrorist attack” that was impossible to prevent, the group revised upwards its estimate of the loss caused by Mr Adoboli from an earlier estimate of $2bn and attempted to shore up the position of chief executive Oswald Grübel.

UBS probe to be run by Deloitte [FT]
British and Swiss regulators have appointed the international audit firm Deloitte to head an investigation into events at UBS that led to $2bn of losses which may have been caused by alleged rogue trader, Kweku Adoboli. According to the UK’s Financial Services Authority and the Swiss Financial Market Supervisory Authority (Finma), the probe, which will be paid for by UBS, will look at “the details of the unauthorised trading activity; the control failures which permitted the activity to remain undetected; and … an assessment of the overall strength of UBS’s controls to prevent unauthorised or fraudulent trading activity in its investment bank”.

Obama’s Muni Tax-Exemption Tweak Is Idea Whose Time Hasn’t Yet Come [Bloomberg]
President Barack Obama’s proposal to reduce the exemption that high earners can claim on interest for their municipal-bond investments is a good example: It should be rejected on the grounds that it only makes sense as part of a sweeping reform. Politicians have been trying to kill the special tax status of muni bonds since Andrew Mellon was Treasury secretary almost 100 years ago. But there are a few good reasons the federal government has wanted to keep the exemption: State and local governments are a (rightly) powerful constituency; capital markets are the most efficient way to match investors with local infrastructure needs, and should be encouraged; and municipal projects tend to be in the public interest.

Lawmakers To Urge IRS To Ease Tax Problems For Same-Sex Couples [Dow Jones]
Even as states increasingly allow same-sex couples to marry, ambiguities in the tax code and administrative tie-ups at the Internal Revenue Service complicate and hinder these couples’ ability to pay their taxes, a bipartisan group of lawmakers will tell the head of the tax agency in a letter to be sent Monday. The IRS should move quickly to clarify the “serious issues” with which domestic partners and same-sex couples grappled while paying their taxes in 2010, urges a letter signed by 74 members of the House of Representatives to IRS Commissioner Douglas Shulman, to be sent Monday.

Tyco to Split Into Three Companies [DealBook]
As it looks to capitalize on opportunities in its disparate industries, the conglomerate will cleave off its North American residential alarm system unit, its flow control group, and its commercial security business into separate companies.