Corporate Loopholes in Tax Law Targeted [WSJ]
Microsoft Corp. and Hewlett-Packard Co. used accounting strategies to hold down their U.S. tax bills while shifting profits in and out of the country, according to a Senate subcommittee investigating how multinational companies exploit the intricate U.S. corporate-tax code. Senate investigators said much of the activity appears to comply with the letter of current tax regulations, though they regard some of the practices used by H-P as potentially abusive and subject to challenge. Both tech giants said their strategies are legal. The findings—from one of a series of reports on corporate-tax practices by the Senate Permanent Subcommittee on Investigations—come as Congress prepares for a debate next year on an overhaul of America's business taxes. "Major U.S. corporations are increasingly earning their profits here but shipping them overseas to avoid paying the taxes they owe," said Sen. Carl Levin, the subcommittee's chairman. The Michigan Democrat called these offshore strategies "unacceptable."
Transfer Pricing and Common Sense
My favorite exchange at the hearing was when Levin--referencing data showing huge profits in tax haven subsidiaries with few employees--asked IRS Deputy Commissioner Michael Danilack: "Where does common sense come in?" Danilack explained that nothing in the tax law required the IRS to look at the number of employees and the distribution of profits relative to the distribution of employees. Hey, it's not the fault of the IRS. Congress needs to change the law--rid it of its obsession with the arm's length standard--and start injecting a little common sense.
GOP retreat on taxes likely if Obama wins
Senior Republicans say they will be forced to retreat on taxes if President Obama wins a second term in November, clearing the biggest obstacle to a deal with Democrats to defuse a year-end budget bomb that threatens to rock the U.S. economy. Republicans have long resisted tax increases of any kind. But taxes are a major battleground in the campaign between Obama and Republican Mitt Romney, Capitol Hill veterans say, and the victor will be able to claim a mandate for his policies. “This is a referendum on taxes,” said Rep. Tom Cole (R-Okla.), a senior member of the House Budget Committee. “If the president wins reelection, taxes are going up” for the nation’s wealthiest households, and “there’s not a lot we can do about that.”
Apple Poised to Sell 10 Million IPhones in Record Debut
So that's nice.
Apple's home-grown Maps leaves users lost
Not so nice.
Checks for vendors stolen from Obama campaign headquarters in Chicago; police investigating [AP]
Three checks for campaign services have been stolen from President Barack Obama’s national campaign headquarters in Chicago. Midwest Press Secretary Ben Finkenbinder says the checks were to be sent to vendors but “made it into the wrong hands.” He says the campaign notified police that he doesn’t expect the theft to have any impact on the campaign.
Alleged Seattle park masturbator: I was getting ‘some sun’
A five-time convicted flasher may have thought he found a way out of another charge when he was arrested in a North Seattle park last month. Confronted by Seattle police after a report that he was masturbating in Cowen Park, Tracy J. McDonald purportedly blamed the weather. At 5:45 p.m. on Aug. 8, a 23-year-old woman walking her dog spotted McDonald topless with his pants around his ankles, Seattle Detective Donna Stangeland said in court documents. McDonald was masturbating, the woman told police, and staring at her. Police arrived and found McDonald, who claimed he was sunbathing. “He said he was getting ‘some sun,’” Stangeland told the court. “There was absolutely no sun where he was standing."