Author: Caleb Newquist

The 2013 Tax Cliff [WSJ]
President Obama unveiled part two of his American Jobs Act on Monday, and it turns out to be another permanent increase in taxes to pay for more spending and another temporary tax cut. No surprise there. What might surprise Americans, however, is how the President is setting up the U.S. economy for one of the biggest tax increases in history in 2013.

A ‘Go To’ Accountant Is Accused of Fraud [NYT]
For almost 15 years, Kinde Durkee has been one of the go-to accountants for Democratic candidates in California. She and her firm kept track of expenditures and contributions and made sure that candidates and party committees’ campaigns complied with California’s tangled election finance laws. But just after Labor Day, Ms. Durkee was arrested by the F.B.I. on charges of siphoning hundreds of thousands of dollars from the campaign of a State Assembly member from Orange County for her personal use. The F.B.I. found that Ms. Durkee had control over nearly 400 campaign accounts and had been shuffling money between them — and out of them — for years.

I.R.S. Extends Estate Taxes Deadline [Bloomberg]
The Internal Revenue Service said on Tuesday that tax returns for estates that are worth more than $5 million for people who died in 2010 will be due on Jan. 17, instead of Nov. 15. The estate tax lapsed during 2010, and the filing process has been complicated because the I.R.S. has not released details and forms that govern how heirs should establish the basis of assets inherited without an estate tax.

Tax Plan for Jobs Bill Has Familiar Ring [NYT]
[T]he White House […] says its plan should be viewed as a rough framework, because its top priority is to get the jobs bill enacted. If Congress approves the president’s jobs plan, it could instead pay for it with other spending cuts or tax increases if that is what the Congressional committee on deficit reduction recommends later this fall.

Income, Poverty and Health Insurance Coverage in the United States: 2010 [U.S. Census Bureau]
There were 46.2 million people in poverty in 2010, up from 43.6 million in 2009 ─ the fourth consecutive annual increase and the largest number in the 52 years for which poverty estimates have been published.

How Payroll Tax Cuts Can Create Jobs [NYT]
The payroll tax is the second most important tax in the United States, normally bringing in almost $900 billion a year through a combination of taxes on employers and employees — about 15 percent of payroll. Although workers may not realize it, most of them pay more payroll tax than they pay in federal income tax. The president proposes cutting the employer portion of the payroll tax by 3.1 percentage points (bringing the combined total down to about 12 percent) for employers with less than $5 million in payroll. Unfortunately, this last condition is business-distorting. Why encourage a $10 million business to split into two $5 million businesses?

GOP Balks at Taxes to Finance Jobs Plan [WSJ]
Mr. Obama proposed limiting itemized deductions for families with taxable income of $250,000 or more a year, ending tax breaks for oil companies and corporate jet owners, and cutting out a tax break for investment-fund managers. The White House says the tax changes would take effect in 2013 and estimates they would raise $467 billion in additional revenue over 10 years. Republicans in Congress, who had been striking a more conciliatory tone about backing at least parts of the proposal the president unveiled last Thursday, disputed the White House contenould cause no additional job losses for the struggling economy.

How to Raise Revenue Without Violating the Tax Pledge [Economix/NYT]
With Republican control of the House of Representatives and enough Republicans in the Senate to filibuster to death any measure deemed by Mr. Norquist to violate the sacred pledge, spending cuts appear to be the only permissible means of reducing the deficit. There are, however, ways of cutting spending by raising revenue. While this sounds like magic, it is done all the time.

Payroll-Tax Cut Is the Working Part of Jobs Plan [Bloomberg]
In contemplating another stimulus package, we should restrict ourselves to interventions that carry the biggest benefit relative to cost. That’s why the president is right to emphasize payroll tax cuts, which get money into the hands of ordinary Americans, and have little potential for public waste. They also create stronger incentives for people to work and for companies to hire. The downside is that lower payroll taxes hurt our long-term fiscal situation, but there is an easy remedy for that. We can create a quid pro quo in which lower payroll taxes are paid for with an offsetting increase in the age at which people can start drawing Social Security. If the age increase occurs many years from now, the reduction in the payroll tax can be budget neutral and wouldn’t hurt the current economy.

Ernst & Young Acquires TPC Tax Risk Practice [AT]
Ernst & Young has acquired the Tax Risk & Process Reengineering Practice of True Partners Consulting, a firm based in Chicago. E&Y also acquired the intellectual property related to the practice as part of the deal. Financial terms of the transaction were not disclosed. The acquisition will enable E&Y to expand its team and capabilities for helping corporate tax clients, especially in the Midwest, deal with globalization, regulation and other challenges.

Mandatory Auditor Rotation — The Financial Times Stumbles Onto the Carousel [Re:Balance]
Round and round it goes.

NYSE Euronext Bulks Up In Market for Receivables [WSJ]
NYSE Euronext plans to boost its role in helping companies secure short-term funding, hiring a longtime GE Capital executive as part of an initiative that includes buying a stake in an electronic market for corporate receivables. The parent of the Big Board aims to use its investment in the New Orleans-based Receivables Exchange as another venue for public companies to borrow money, complementing the long-term funding provided via stock-market listings at a time when businesses face financing difficulties.

H&R Block won’t offer refund-backed loans in 2012 [AP]
Wah, wah, waaahhh.

Obama May Limit Tax Breaks on Muni Bonds [Bloomberg]
The president’s $447 billion job-creation plan would pare the tax break for municipal-bond interest to 28 percent for couples earning more than $250,000 a year. Such tax-exempt interest is currently worth 35 percent for earners in the top tax bracket because that’s the amount they would otherwise have to pay on their income. Any move to limit the tax advantage for municipal securities would face resistance from local-government officials because the break bolsters demand for their debt, driving down the interest rates they pay when borrowing for public works. Investors in the $2.9 trillion market for municipal bonds are willing to accept lower returns because the income isn’t taxed.