Accounting News Roundup: Charitable Deductions and Bad Passwords | 08.08.17

By | 2 weeks ago

How’s tax reform coming along?

Felix Salmon writes about the folly of the charitable deduction, and by extension, why the Trump Administration’s suggestion to raise the standard deduction is a good idea. A larger standard deduction means lower taxes for many people, and it also means fewer taxpayers itemize deductions, which means complying with the tax code is easier. Hey, and those are two goals of tax reform.

But this is politics, and not everyone is thrilled about a larger standard deduction, and interestingly, that distaste goes back decades. Salmon noted this post from Joe Thorndike’s Tax History Project that includes quotes from rabid anti-standard deductionites from the 1940s that don’t spare the hyperbole: “It savors of communism to make work simpler for the bookkeeper,” and “It is the first long step down the road toward the destruction of religious freedom and toward federal subsidy and control of education and charity. That is fascism,” are two gems.

Anyway, to avoid the wrath of the charity lobby, some Republican lawmakers are pushing for a “universal charitable deduction,” according to Richard Rubin’s report in the Wall Street Journal. A universal charitable deduction would “let taxpayers deduct donations even if they don’t itemize.” It may result in billions more being given to charity, but it would also reduce government revenue by even more, which makes big tax cuts — the ultimate goal of the GOP — harder to justify.

Elsewhere in tax-reform-is-hard-news: a Deloitte survey found that few people expect the 15 percent corporate rate to become a reality.

Cybersecurity

Awhile back, Megan Lewczyk wrote about how awful passwords policies are: upper case, special characters, numbers, etc., etc. It’s all very exhausting. Funny story about all those guidelines — the guy who invented them now says he regrets the policies he came up with:

Back in 2003, as a midlevel manager at the National Institute of Standards and Technology, Bill Burr was the author of “NIST Special Publication 800-63. Appendix A.” The 8-page primer advised people to protect their accounts by inventing awkward new words rife with obscure characters, capital letters and numbers—and to change them regularly.

The document became a sort of Hammurabi Code of passwords, the go-to guide for federal agencies, universities and large companies looking for a set of password-setting rules to follow.

The problem is the advice ended up largely incorrect, Mr. Burr says. Change your password every 90 days? Most people make minor changes that are easy to guess, he laments. Changing Pa55word!1 to Pa55word!2 doesn’t keep the hackers at bay.

To illustrate this problem in a more fashionable sense, a researcher from Carnegie Mellon University “put 500 of the most commonly used passwords on a blue and purple shift dress she made and wore to a 2015 White House cybersecurity summit at Stanford University.”

Conventional wisdom (i.e. this cartoon) now suggests that smashing four random words together is more effective than substituting dollar signs for the letter s in “password.” But no one use “catvacuummountainbanana,” okay? I called dibs on that.

Previously, on Going Concern…

The Grant Thornton compensation thread is now open for your enjoyment.

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