Bramwell's Lunch Beat: KPMG’s Revenues, Internet Tax Ban, Cadillac Taxby
KPMG global revenue drops 1.5% in US dollar terms
KPMG International logged a 1.5 percent decline in global revenue in US dollar terms to $24.44 billion in its latest fiscal year, wrote Maria Armental of the Wall Street Journal. In local-currency terms, as KPMG and other major accounting firms prefer to report their revenue growth, KPMG's global revenue for the year ended Sept. 30 rose 8.1 percent, compared with a 6.3 percent increase a year earlier. The difference between the US dollar numbers and the local-currency numbers stems from the strength of the US dollar during the year. KPMG's consulting business continued to gain ground from its comparatively mature auditing business. KPMG's advisory revenue edged up 0.1 percent in US dollars to $9.1 billion, while tax revenue rose 0.8 percent to $5.31 billion, driven by increased demand for tax compliance and tax-advisory services, the firm said. Auditing revenue, meanwhile, declined 4.1 percent to $10.03 billion.
Internet tax ban likely to become permanent
A proposal to permanently prevent states from taxing access to the Internet is included in a broader bill expected to pass Congress, wrote Mario Trujillo of The Hill. Extending the tax ban indefinitely would be a key victory for lawmakers who have tried for years to remove the sunset date on the 1998 ban, which has required several extensions. The Internet tax ban has been added to the conference report for customs and trade enforcement legislation negotiated by the heads of the tax-writing committees in both the House and Senate. It is soon expected to get a vote. The ban forbids states or local government from taxing the monthly payments that Internet subscribers dole out to companies, such as Comcast, that provide service. âIn my view, when you have something that works, that has stood the test of time, you ought to make it permanent,â said Sen. Ron Wyden (D-OR), the top Democrat on the Senate Finance Committee.
Dem fault lines emerge on âCadillac tax'
Peter Sullivan of The Hill wrote that prominent Obamacare supporters are lashing out against a plan backed by other Democrats to delay the contentious âCadillac taxâ for two years, warning that the delay would blow a hole in the healthcare law. A two-year suspension of the 40 percent tax on high-cost health insurance plans is expected to appear in a year-end package of tax breaks known as âtax extenders,â though negotiations aren't yet complete. Democratic leaders in both chambers of Congress favor scrapping the tax altogether, which would be the biggest legislative change to the law since its enactment. However, there is a division â with some Democratic lawmakers, health experts, and, most notably, the White House â pushing support for the tax because it is essential to funding the healthcare law and keeping healthcare costs in check. âA two-year delay, I'm concerned, turns into a permanent delay,â said Sen. Mark Warner (D-VA).
Clinton targets âearnings stripping' by corporate tax avoiders
Democratic presidential candidate Hillary Clinton on Wednesday called for action on âearnings strippingâ as part of her broader plan to stop corporate inversions and other corporate strategies for shifting profits overseas to avoid US corporate income taxes, wrote Jennifer Epstein of Bloomberg. Earnings stripping is a technique companies use to avoid taxes by shifting their debt to American soil while moving profits overseas. The Clinton campaign estimates that a crackdown on earnings stripping could bring in about $60 billion in tax revenue over 10 years. She is also urging lawmakers to pass an âexit taxâ aimed at penalizing US companies that move their tax addresses offshore. Clinton has also called for Congress to raise the threshold of shares that a US company must sell to foreign shareholders in order to shift its tax address overseas from 20 percent to 50 percent.
Alaska governor calls for income tax
As oil prices remain low, Alaska Gov. Bill Walker on Wednesday called for the state's first income tax in 35 years, wrote Melanie Eversley of the USA Today. Walker announced the proposal that is part of what is called the New Sustainable Alaska Plan. The plan, paired with a budget proposal, is geared toward closing a $3.5 billion deficit the state is carrying. Right now, Alaska is the only state that does not have a state sales tax or personal income tax. For decades, Alaska has been dependent on income from oil. Crude oil prices have been hovering at seven-year lows, and earlier this week, they dipped to $37 a barrel. A small income tax and a reduction in the state's Permanent Fund dividends that benefit residents were part of Wednesday's rollout. âThis is the time when Alaskans need to pull together,â Walker said via Twitter. âThere is no perfect budget plan other than the plan that gets done.â
- A permanent Internet tax ban (Wall Street Journal)
- A great Christmas gift: Tax reform (The Hill)
- Do we need Obamacare's âCadillac tax'? Yes â and no. (Los Angeles Times)
- Star Wars: Return of the Tax Credit (Reason)
- Yahoo changes direction, but those tax troubles could well follow (Washington Post)