By Dan Walters, CALmatters | PUBLISHED: June 25, 2018 at 12:00 pm | UPDATED: June 25, 2018 at 12:34 pm When President Donald Trump signed an overhaul of the federal tax system six months ago, there was much complaining from politicians in California, New York and other high-taxing – and politically blue – states. They particularly disliked a new $10,000 limit on deductibility of state and local taxes because it would make their taxpayers, particularly the most affluent, feel the full financial effects of high state taxes. They feared that those highly impacted taxpayers would find ways to reduce or eliminate their state tax liabilities since they could no longer write them off on federal tax returns, and that would cut into state revenue streams. The potential impact would be especially heavy in California because of the state’s lopsided dependence on its highest-income residents. The top 1 percent of California taxpayers account for nearly half of the … [Read more...] about Walters: IRS nixes California’s federal tax dodge scheme
Tax saving schemes
The taxman has teamed up with the advertising watchdog to crack down on companies touting schemes to avoid tax. The complicated arrangements, which often involve a bewildering array of loans or shell companies, offer to limit their user’s liability for income tax, national insurance or stamp duty. HM Revenue & Customs is active in challenging them, saying these “tax avoidance” plans aren’t likely to hold up to scrutiny. But now it seems to be trying out a new tactic. Rather than attempting to close the schemes down, HMRC is reporting firms that make spurious claims about tax mitigation to the Advertising Standards Authority (ASA). The watchdog yesterday published its ruling on a company called CDP Tax and Wealth, which trades under the name Fiducia Wealth and Tax. The firm’s website claimed the scheme would “save you a minimum of 60pc” on stamp duty and that the company was endorsed by the Solicitors Regulation Authority. The ASA ruled … [Read more...] about Taxman and advertising watchdog get tough on dubious tax avoidance schemes
(MoneyWatch) Starting in January, Americans will no longer be able to use the Cayman Islands and Costa Rica as tropical tax havens.New agreements with the countries, announced by the Treasury Department last week, are designed to enforce the Foreign Account Tax Compliance Act, or FATCA. The 2010 law is aimed at curbing people's ability to avoid taxes by parking their money overseas. Since its passage, the U.S. government has signed agreements with 12 other nations and says it is close to signing agreements with 16 more. Although specifics may vary slightly, essentially the pacts require foreign financial institutions to provide annual reports to the Internal Revenue Service on American citizens with more than $50,000 on account with the companies. Estimates of U.S. tax revenue lost through offshore tax-haven schemes by individuals range from tens of billions of dollars to hundreds of billions. The Organization for Economic Development and Co-operation officially designated Costa … [Read more...] about Americans blocked from dodging taxes in Caymans, Costa Rica
BRUSSELS - The European Union is broadening its crackdown on multinationals' tax avoidance schemes, opening Tuesday an investigation into Amazon's (AMZN) practices on suspicion the online retailer is not paying its dues on profits made across the 28-nation bloc. The probe adds another high-profile name to the list of companies targeted by the EU, which is already investigating Apple Inc., coffee chain Starbucks and the financial arm of carmaker Fiat. The EU's executive Commission is trying to curb companies' ability to avoid taxes by shifting profits made across the bloc to a subsidiary in one particular country where the company enjoys a very low tax rate. In Amazon's case, the company registers its profits from across the EU at its unit in Luxembourg, a tiny country whose economy depends on attracting foreign capital. Amazon's taxable profits in Luxembourg are further reduced by making royalty payments to another Luxembourg-based Amazon entity that is not subject to corporate … [Read more...] about EU broadens corporate tax crackdown to Amazon
Opinion By David Sirota Published 5:59 pm, Thursday, August 28, 2014 READ ANOTHER OPINION Potent legal claims throw Trump on the defensive A reminder of just how wrong Trump apologists were Republicans demonstrate they aren't up to the task of... What authoritarians do: Attack the apolitical administration... Reading companies' annual reports to the Securities and Exchange Commission is a reliable cure for insomnia. Every so often, though, there is a significant revelation in the paperwork. This year, one of the most important revelations came from Microsoft's filings, which spotlighted how the tax code allows corporations to enjoy the benefits of American citizenship yet avoid paying U.S. taxes. According to the SEC documents, the company is sitting on almost $29.6 billion it would owe in U.S. taxes if it repatriated the $92.9 billion of earnings it is keeping offshore. That amount of money represents a significant spike from prior years. To put this in … [Read more...] about Should companies have to pay taxes?