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Bramwell's Lunch Beat: Tax Bill Votes, ACA Tax Fears, Disclosures Dumped

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Dec 17th 2015
Staff Writer and Editor AccountingWEB
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House poised to approve $600 billion in tax cuts
The House is poised to pass more than $600 billion in tax cuts on Thursday, wrote Richard Rubin of the Wall Street Journal. The deal would take popular tax breaks that expired at the end of 2014 – such as the research and development credit – and make them permanent. The legislation would permanently extend expansions of the Child Tax Credit, Earned Income Tax Credit, and a tuition tax credit. Also, “bonus depreciation” – faster write-offs of capital equipment – would be extended through 2019. Residents of states without income taxes could deduct sales taxes instead, and the 2.3 percent excise tax on medical devices intended to help fund the Affordable Care Act would be suspended for 2016 and 2017. A second measure, which contains five-year extensions of tax credits for wind and solar energy and a two-year delay in the “Cadillac tax,” will be merged with the first tax bill. The merged bill will go to the Senate on Friday.

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Obamacare fear after tax freeze
Obamacare advocates are growing fearful that several key taxes frozen in Wednesday's budget deal will never go into effect, wrote Sarah Ferris of The Hill. The pair of budget deals negotiated by congressional leaders would halt or delay three Affordable Care Act taxes, forcing the president to make his biggest concession yet since his healthcare law was passed. Hours after the deal was announced, White House spokesman Josh Earnest downplayed the biggest change – a delay of the “Cadillac tax” – as “minimal.” But supporters of the law say they're worried that the delay of these taxes, until after Obama leaves office, will ultimately lead to their demise. “The fear for advocates of the tax is that once Congress starts delaying it, it won't last,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation and former Clinton administration health advisor.

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Deal restricts SEC from requiring disclosure of corporate political contributions
The $1.15 trillion spending bill for fiscal 2016 unveiled by congressional lawmakers late Tuesday restricts the US Securities and Exchange Commission (SEC) from forcing public companies to disclose their political activities, wrote Andrew Ackerman of the Wall Street Journal. The provision is a blow to liberal groups and many Democrats who have long pushed – unsuccessfully – for the SEC to advance such rules. It is one of the few Republican-backed measures, or “riders,” included in the legislation. It needs Democratic votes to clear Congress. If signed into law, the provision would prevent the SEC from using funds authorized by the bill to “finalize, issue, or implement” a rule on disclosure of political contributions, or contributions to trade associations and other tax-exempt organizations.

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Accounting firms, SEC hobble US audit watchdog
Charles Levinson of Reuters takes a look at some of the friction that has developed between the SEC and the Public Company Accounting Oversight Board (PCAOB). In his article, Levinson points to the PCAOB derailing the C-suite ambitions of now-SEC Chief Accountant James Schnurr. “In his new SEC job, Schnurr now had direct authority over the PCAOB,” Levinson wrote. “As deputy managing partner at [Deloitte & Touche], Schnurr had commanded an army of auditors – until a string of damning PCAOB critiques of Deloitte's audits led to his demotion.” Levinson also mentions a speech Schnurr made last December in which he said the PCAOB was “moving too slowly” to address auditing failures that had shaken public confidence in those firms. Schnurr's words hit their intended target – PCAOB Chairman James Doty was among those attending the speech, and Schnurr was Doty's new supervisor. “This is going to get ugly,” Doty said to a colleague afterward, according to the article.

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Quick Links:

  • Does delaying the ‘Cadillac tax' spell the beginning of its demise? (Talking Points Memo)
  • Has the ‘Cadillac tax' hit a dead end? (Modern Healthcare)
  • How you'll benefit from the new tax breaks deal (CNN)
  • The hidden agenda behind this year's tax extender bill (TaxVox)
  • How Ryan's big tax deal could lead to major reform (Fiscal Times)
  • Why Congress plans to extend tax breaks for NASCAR tracks, horse racing (Huffington Post)
  • When it comes to corporate tax breaks, Congress stops caring about the deficit (Huffington Post)
  • Tax policy versus tax rates: A look inside the Republican tax reforms (Huffington Post)
  • Hillary Clinton's tax plan backed by Warren Buffett (Wall Street Journal)
  • The IRS is in crisis and the tax community needs to help (Tax Analysts)

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