WisPolitics has a useful roundup of Doyle’s speech and reaction around the state.
Category: Taxes
More on the KPMG Tax Shelter Case
Yet more examples of the spaghetti that is our tax law:
- Lynnley Browning:
Former KPMG tax professionals who are facing criminal charges over questionable tax shelters challenged the government yesterday to prove that they had broken the law.
The defendants filed more than two dozen motions in United States District Court in Manhattan yesterday, asking among other things that charges be dropped because no court had ever ruled the shelters in question illegal.
- David Reilly and Paul Davies:
One defense filing, submitted to the U.S. District Court in New York, accused prosecutors of “distorting” the facts and “obfuscating the truth-finding process” in order to win the case. By threatening KPMG with criminal indictment, the motion said, the government forced the firm to accept a “draconian” deferred prosecution agreement in which it admitted the tax strategies were fraudulent and agreed to waive attorney-client privilege.
“The goal is obviously not justice, nor truth, but instead the unsavory desire to tack another skin to the wall,” the filing said.
IRS Sued on Failure to Release Tax Data
Records showing how thoroughly the Internal Revenue Service audits big corporations and the rich, and how much it discounts the additional taxes assessed after audits, are being withheld from the public despite a 1976 court order requiring their disclosure, according to a legal motion filed last week in federal court in Seattle.
For decades, the information was given at no charge to a professor at Syracuse University, Susan B. Long, who made it available on the Internet at trac.syr.edu, with tools for people to conduct their own analyses.
Among other findings, Professor Long’s information has shown that in 1999 the poor were more likely than the rich to be audited.
David Burnham, co-director with Professor Long of the Transactional Records Access Clearinghouse, which collects raw government data, said the withheld information made it impossible to evaluate the intensity of audits. Mr. Burnham noted that the withheld data included figures that indicated how much auditors say is owed in extra taxes, but that the tax agency lets taxpayers negotiate down.
“It is simply impossible to evaluate the I.R.S. without this data,” Mr. Burnham said, “and they know it.”
What Worries Bill Gross
This recovery is different because it was spawned and subsequently nurtured on the back of asset appreciation alone. Greenspan and company have high hopes that investment and then employment will ultimately kick in and work their self-sustaining magic one more time, but jobs and investment these days go to Asia at the margin, and domestic animal spirits have been squelched by the looming inevitability of reduced returns on risk capital in a low interest rate world. I’ll leave the Asian story for another day or let you turn on CNN at 11:00pm EST to get your fill of Lou Dobbs – the Dobbsian spectre of foreign competition on the march is undeniably real. My point in this Outlook will be an extension of the thoughts expressed over the past few months that this recovery is on fragile legs because it is asset-appreciation-based and that future asset appreciation is vulnerable based on the weakening stimulative power of interest rates. Therein lies the potential for a white hot speculative blaze turning into a destructive recessionary fire. Such an analogy inevitably suggests that in future years, Rome, Georgia, may not be on fire, but burning.
Tax Shelter Case Details
Jonathan Weil continues to dig into the ongoing KPMG tax shelter saga, this time, discussing several large investors who took advantage of the shelters to save millions in taxes.
City of Madison Comprehensive Plan
A couple of hours before the council meeting in the same room, they attended a presentation about the City of Madison Comprehensive Plan. This plan, mandated by state law, and a work in progress over the last couple of years, will serve as a long-term roadmap for the city’s infrastructural future. It is also up for a vote on Tuesday, Dec. 13 by the full council, though it is likely to be referred to a subsequent meeting in early January.
Automakers Lining Up for Aid
Jeffrey H. Birnbaum and Sholnn Freeman:
Troubled U.S. automakers and their allies on Capitol Hill are seeking billions of dollars in aid from the federal government ranging from health coverage for their workers to extra tax write-offs for themselves.
They’re also asking for one rhetorical favor: Please don’t call the requests a bailout.
I don’t view it as a bailout,” Sen. Carl M. Levin (D-Mich.) said.
“We’re not looking for a bailout,” agreed William C. Ford Jr., chairman of Ford Motor Co.
Tax Cuts for the Very Rich, AMT for the Rest of Us
DO House Republicans harbor some sort of deep rage against moderately affluent families with lots of children?
Maybe not, but take a close look at the $56 billion package of tax cuts that House leaders hope to pass before Christmas, and you have to wonder.
If it were to become law, any family with two or more children and an income of $100,000 ought to run for the hills.
Sift out dozens of nickel-and-dime provisions, and the essence of the House bill comes down to one provision that it includes and one that it omits.
Citizens for Tax Justice Reports Released
Via Paul Caron:
Citizens for Tax Justice has published several tax position papers:
- Two New 2006 Tax Cuts Benefit Only Wealthiest Few (11/21)
- Extending Capital Gains and Dividends Loopholes Would Mostly Benefit the Wealthiest 1% (11/18)
- Child Credit Phase-In Rules Hit Hurricane Victims Hardest (11/8)
For further analysis, see Stuart Levine’s Tax Law & Business Commentary
Local Taxes: Accounting Rule Changes on Retiree Health Care Costs
A looming accounting change is forcing state and local governments to fess up to something that’s been lurking on their books for years: Many have made costly retirement health-care promises without planning how to pay for them.
Under a new accounting rule, governments soon must start recognizing their long-term obligations to pay for retirees’ health benefits — and, for the first time, publicly disclose what it would cost each year to fund that liability.
For many governments, the promised amount is likely to be sizeable enough to prompt big changes such as cutting retiree benefits, borrowing money and diverting tax dollars from other spending priorities — or risk a credit-rating downgrade that could significantly boost borrowing costs. Estimates of obligations for some states range from $500 million to as much as $40 billion.