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Bramwell's Lunch Beat: SEC Nominees, EU Tax Ruling, Confused Dewey Jurors

Oct 21st 2015
Lunch Beat
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Obama taps Lisa Fairfax and Hester Peirce to serve on SEC
President Obama on Tuesday selected Democrat Lisa Fairfax and Republican Hester Peirce to serve on the US Securities and Exchange Commission (SEC), wrote Sarah N. Lynch and Jeff Mason of Reuters. If confirmed, Fairfax would replace Luis Aguilar, whose term expired, and Peirce would replace Daniel Gallagher who stepped down in early October. Both nominees must be confirmed by the Senate before they can start serving their terms. Fairfax, a law professor at George Washington University, has the potential to win support from progressive Democrats like Sen. Elizabeth Warren (D-MA). Peirce, a former Senate Banking Committee staffer who now works as a senior research fellow and director of the financial markets working group at the Mercatus Center at George Mason University, was widely expected to be tapped for the Republican seat.

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Starbucks, Fiat told to repay tax as EU sets up Apple clash
Starbucks Corp. and a Fiat Chrysler Automobiles NV unit must each pay as much as 30 million euros ($34 million) in back taxes after the European Union (EU) said they were handed illegal fiscal deals by the Netherlands and Luxembourg, wrote Stephanie Bodoni and Gaspard Sebag of Bloomberg. The coffee company and the Italian carmaker are the first two companies facing repayment orders as EU regulators seek to clamp down on tax-dodging corporations. The decision now sets up a showdown with Apple Inc. and Amazon.com Inc., which are also embroiled in the two-year-long tax probe. “Tax rulings that artificially reduce a company's tax burden are not in line with EU state aid rules. They are illegal,” Margrethe Vestager, EU competition commissioner, said in an emailed statement. “All companies, big or small, multinational or not, should pay their fair share of tax.”

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Jury in Dewey law firm case felt inundated by details
Sara Randazzo and Nicole Hong of the Wall Street Journal wrote that the mistrial this week in the closely-watched Dewey & LeBoeuf LLP case is the latest example of the hurdles prosecutors face bringing complex financial cases to a jury. Prosecutors from the office of Manhattan District Attorney Cyrus Vance Jr. sought to prove that Dewey's top three leaders masked the troubled nature of the firm's finances ahead of its 2012 collapse. During the trial, they called 41 witnesses and displayed hundreds of emails to detail the often arcane accounting adjustments they claimed underpinned the alleged scheme. One juror said some thought the three defendants should have been tried separately. Others said they wanted more explanation of what made the accounting adjustments illegal. “The jurors were confused. They didn't know what the story was,” said Scott Wagner, a partner at law firm Bilzin Sumberg Baena Price & Axelrod LLP.

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Meet the ‘tax extenders'
Brian Faler of Politico put together a quick guide on some of the tax provisions that will soon come up for renewal. “This fall, a strange-looking package of tax breaks is likely to come before Congress,” he wrote. “If the past is any indication, it's going to be pushed through at the very last minute, just as lawmakers are getting ready to leave for their Christmas recess. There's a break for Puerto Rican rum, one for NASCAR tracks, and another that rewards corporate research and development spending. And one of them – this is not a typo – is an exception to an exception to an exception to a tax rule. It benefits multinational banks. This year's batch, which the Senate wants to renew for two years, is projected to cost more than $85 billion. Though tax experts scoff at many of the provisions, they're rubber-stamped with minimal scrutiny or debate. And though they're considered temporary, they're rarely allowed to die.”

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Quick Links

  • Wall Street faces smaller bonuses, possible layoffs (USA Today)
  • Tax on ‘Cadillac' health plans splits leaders (Boston Globe)
  • Sprint loses bid to dismiss $300 million NY tax fraud lawsuit (Reuters)
  • Grover Norquist isn't finished (Politico)
  • Robin Hood's very merry man (Wall Street Journal)
  • The self-defeating corporate income tax (Bloomberg View)
  • BBVA Suiza SA to pay $10.4 million to settle US tax case (Bloomberg)
  • Congratulations Tennessee: You've got the most regressive tax system in America (The Atlantic)
  • The best tax policy proposal of the year (Tax Analysts)
  • Iowa to refund local income taxes after Wynne decision (Tax Foundation)
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