Ben Carson's tax overhaul includes flat rate, end to top deductions
Republican presidential candidate Ben Carson on Monday called for imposing a 14.9 percent flat tax rate on income, ending taxes on capital gains and dividends, and abolishing the charitable deduction and all tax credits, wrote Richard Rubin of the Wall Street Journal. Carson's flat tax would apply only to income above 150 percent of the poverty level, meaning that a family of four would face almost no income taxes on the first $36,375 of earnings. Anyone below that level would pay what the campaign calls a âde minimisâ amount of taxes, âto treat everyone in America as citizen-owners.â Many lower-income households would pay more in taxes than they do now. That's because the plan eliminates breaks such as the Earned Income Tax Credit and Child Tax Credit, which currently allow about 45 percent of US households to pay no federal income tax.
Clinton says January tax proposals will âgo beyond' Buffett Rule
Democratic presidential frontrunner Hillary Clinton will unveil proposals this month that will âgo beyond the Buffett Ruleâ to raise the effective tax rates paid by the wealthiest Americans, wrote Jennifer Epstein of Bloomberg. âAs president, I'll do what it takes to make sure the super-wealthy are truly paying their fair share,â Clinton said in a statement responding to the IRS's release of new data on tax rates paid by the 400 wealthiest US households, which averaged 22.89 percent in 2013. She called billionaire Warren Buffett's plan, which would set the minimum effective tax rate for those earning $1 million per year at 30 percent, âone idea that would help achieve greater fairness in our tax system.â Clinton hinted at the coming proposals during a December campaign stop in Omaha, Nebraska, where Buffett endorsed her, saying then that she wanted to âgo even furtherâ than his idea.
âCadillac tax' delay gives CFOs breathing room
Maxwell Murphy of CFO Journal wrote that December's omnibus budget package containing a measure to delay a provision of the Affordable Care Act by two years is giving finance chiefs some extra time to prepare. The tax on high-cost employee health plans, or âCadillac tax,â puts employers on the hook for a 40 percent levy on any excess cost of health plans above certain thresholds. Even before the delay, many companies and municipalities had already begun to assess whether their plans would trigger additional payments and make preemptive changes to avoid it. âIt gives companies a little more time if they hadn't taken it seriously,â said Gary Claxton, vice president for the Kaiser Family Foundation. Many companies said they are concerned about a large tax bill for healthcare plans they provide. Some are moving to less expensive plans and shifting more of the cost to employees.
FASB proposes to curb what companies must disclose
Gretchen Morgenson of the New York Times wrote that investor groups are none-too-thrilled with a Financial Accounting Standards Board (FASB) proposal that would effectively change the definition of materiality. Under the FASB's proposal, materiality will become a strictly legal concept identical to the definition cited by the US Supreme Court in securities fraud cases. In the new framework, information would be considered material if it was likely to be seen by a reasonable person as significantly altering the total mix of facts about a company. In practice, investors say, that change will not only set too high a bar for what is material information, but it will also effectively outsource to lawyers what is better left to auditors: disclosure decisions on accounting matters. âFASB's proposal would be a sweeping change that would make financial statements much less valuable as a source of information for investors,â said Amy Borrus, interim executive director at the Council of Institutional Investors.
Michael G. Oxley, co-author of anti-fraud legislation, dies at 71
Michael Oxley, a former Ohio representative who helped write landmark anti-fraud legislation â the Sarbanes-Oxley Act â after a wave of corporate scandals that brought down Enron Corp. and WorldCom, died on Jan. 1 in McLean, Virginia, the Associated Press wrote. He was 71. Oxley, a Republican, left Congress in 2007 after 25 years in the House, where he devoted most of his time to issues involving corporate oversight and insurance protection. He led an effort to investigate Enron, the failed energy company, and helped create new accounting requirements in the Sarbanes-Oxley Act, which took effect in 2002. Sen. Paul Sarbanes (D-MD) also sponsored the legislation. The law reshaped corporate oversight after accounting scandals in 2001 and 2002 at Enron, WorldCom, and other major corporations exposed inadequate internal controls and auditors who had become too cozy with the companies whose books they examined.
- Pennsylvania CPAs say state economic conditions getting worse (PICPA)
- Accountants voice concern over EU guidelines for bank auditors (Reuters)
- Ireland says EU tax decision on Apple likely after elections (Reuters)
- Deloitte confirms lawsuit over losses by African bank investors (Bloomberg)
- Why we fear the IRS (Bloomberg View)
- IRS crackdown on tax cheats goes into overdrive (Huffington Post Canada)
- Tax follies for 2016 (Washington Times)
- More states giving heirs a break on estate taxes (Kiplinger's Personal Finance)
- Are dividend taxes harmless? Don't bet on it! (Tax Foundation)
- H&R Block will give away $32 million with daily sweepstakes (Kansas City Business Journal)
- No Illinois tax refunds through March 1 (Chicago Tribune)
About Jason Bramwell
Jason Bramwell is a staff writer and editor for AccountingWEB. He has nearly 20 years of experience in print and online media as a journalist and editor.