Monday, April 20, 2015

Fueled by a wave of inversions

Letter From Orrin Hatch (Chair, Senate Finance Committee) to John Koskinen (Commissioner, IRS) Apr. 13, 2015
New York Times op-ed: Shaming Those Who Skip Out on Taxes, by Ricardo Perez-Truglia (Harvard) & Ugo Troiana(Michigan):
In 2006, according to an estimate by the United States Treasury Department, Americans underpaid their taxes by about $450 billion. For that year, that’s roughly equal to Pentagon spending, and more than the gross domestic products of Sweden and Switzerland.
Bloomberg, Ten Percent of S&P 500 Companies Avoid Paying U.S. Taxes:
When it comes to taxes, corporate America is getting a bit less corporate. And a bit less American.
Fueled by a wave of inversions, a record 54 companies in the Standard & Poor’s 500 Index of leading U.S. firms are now at least partially exempt from the corporate income tax. That’s more than twice the number four years ago.
In Cvancara v. Commissioner, T.C. Memo. 2013-20, the Tax Court disallowed a business expense deduction for a Snickers bar consumed while working.

Michael Graetz (Columbia), How Do We Fix America’s Tax System?:
The United States hobbles itself in today’s international economy by continuing to rely so heavily on income taxation. The truth is that we need a tax reform that is considerably bolder than either Congress or the president is now contemplating. We need to rebalance our federal tax system to take advantage of our status as a low-tax country by relying less rely less heavily on income taxation. To create a simple, internationally competitive and viable long-term solution to our fiscal requirements, we should return the income tax to its original purpose: the collection of a simpler tax on high-income earners who tend to have multiple income sources. In order to do that, we need to tax consumption—that is, sales of goods and services. By enacting a broad-based tax on sales of goods and services now used by more than 150 countries worldwide, we could use the revenues to finance an income-tax exemption of $100,000 of family income and to lower substantially the individual income-tax rate on income above that amount—freeing over 150 million Americans from ever having to deal with the IRS. Through payroll-tax cuts and debit cards to be used at checkout counters, we can protect low- and middle-income families from any tax increase.

Thirty-five-year-old billionaire Mike Cannon-Brookes has traded up handsomely in line with his status as top of the BRW young rich list. The co-founder of software firm Atlassian has emerged as the $12 million buyer of the Centennial Park mansion of prestige car dealer Ian Pagent and his wife Maryanne.
$12 Million purchase by young Mike

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