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President Joe Biden will seek new taxes on the rich, including a near doubling of the capital gains tax for people earning more than $1m a year, to pay for the next phase in his $4tn plan to reshape the American economy. The American Family Plan will also propose raising the top marginal income tax rate to 39.6% from 37%; in all it will include about $1.5tn in new spending and tax credits meant to fight poverty, reduce child care costs for families, make pre-K and community college free to all, and establish a national paid leave program. The proposed legislation would be separate from the $2.3tn infrastructure package known as the American Jobs Plan, which would be funded by an increase in the corporate tax rate to 28%.

 

CNBC	New York Times

Democrats are making another push for the Biden administration to include a repeal of the cap on state and local tax deductions in its long-term economic program, a move that would give the write-off a White House seal of approval. Representative Josh Gottheimer, a New Jersey Democrat, sent a letter to Treasury Secretary Janet Yellen Wednesday making a plea to include repeal of the $10,000 cap on the SALT deduction in the administration’s proposals to pump trillions of dollars into the economy with spending initiatives in part funded by tax hikes. Mr Gottheimer said restoring the full SALT benefit could be paid for by increasing IRS enforcement efforts to collect taxes that go unpaid. Ms Yellen has previously said she would work with Congress on ways to ease the “disparate treatment” across taxpayers from the deduction limit. But she hasn’t committed to any particular plan.

 

Bloomberg

The Washington House has approved a capital gains tax on the sale of high-profit stocks and bonds in excess of $250,000. The underlying measure would impose a 7% tax on the sale of stocks, bonds, and other high-end assets in excess of $250,000 for both individuals and couples. A person whose business makes more than $10m per year is also subject to the tax if they make more than $250,000 in selling the business. Supporters of the tax say that Washington - one of just a few states without an income tax - leans too heavily on its sales tax, disproportionately affecting those with less income. The money expected to be raised is tagged for child care and early learning. Opponents of a capital gains tax have argued that it’s illegal under state law, and the debate is likely to end up in court if the full Legislature approves it and Gov. Jay Inslee, who supports the tax, signs it into law.

 

US News and World Report

The FASB will host a virtual roundtable on the implementation of the current expected credit losses (CECL) standard and related technical issues, on May 20th from 9a.m. to 12p.m. Participants will include representatives of financial institutions of various sizes, regulators and other stakeholders. The session is intended to help FASB members and staff gather additional feedback on CECL implementation, including technical issues related to purchased financial assets with credit deterioration (PCD) and troubled debt restructurings (TDRs). 

 

Monitor Daily

Technology giants led by Apple and Microsoft disclosed more than $100bn in profit outside the U.S. in their last fiscal years, making them prime targets of President Joe Biden’s proposals to boost taxes on earnings stashed overseas. The tax proposals, unveiled this month to help foot the bill for massive infrastructure plans, target common tactics used by U.S. multinationals such as stashing income-generating assets in low-tax offshore jurisdictions. The tech industry is particularly adept at shifting profits to tax-friendly locales because its main assets - software code, patents and other intellectual property - are relatively easy to move around compared to factories and other physical assets. Biden wants to raise the levy on global intangible low-taxed income, or Gilti, to 21% from 10.5% and limit the use of foreign tax credits, according to Andrew Silverman, a tax policy analyst at Bloomberg Intelligence. The Tax Foundation, a right-leaning think tank, estimates the proposed changes to Gilti could increase corporate tax bills by almost $300bn over a decade. Much of that cost would likely fall on the tech sector.

 

Bloomberg

A group of Senate Republicans have published a two-page outline for a $568bn infrastructure plan, an alternative to President Joe Biden’s $2.3tn plan as lawmakers seek a bipartisan compromise on the issue. Of the $568bn in the outline, $299bn would go toward roads and bridges, an increase from the $115bn the Biden administration’s plan proposes. The GOP plan also dedicates $61bn to public transit systems, $20bn to rail and $65bn for broadband. The summary released Thursday does not provide full details on how it would cover the cost of the bill, although it does propose collecting user fees for electric vehicles and repurposing existing federal spending. It also opposes Mr. Biden's proposed tax increases on companies. 

 

NPR

New York Times

Wall Street Journal

The U.S. jobs market recovery accelerated its pace last week as fewer Americans headed to the unemployment line. The Labor Department said that first-time claims for unemployment insurance fell 39,000 to 547,000, well below the Dow Jones estimate for 603,000, and a new low for the COVID-19 pandemic era. The four-week moving average, which smooths out volatility in the weekly figures, was 651,000, also a pandemic low. Continuing claims, which run a week behind the headline data, also fell, dropping 34,000 to 3.67m. “This dip in jobless claims looks good in isolation but what really matters is that it confirms that last week’s unexpected plunge was no fluke,” commented Ian Shepherdson, chief economist at Pantheon Macroeconomics. The claims report indicates that layoffs are falling quickly, he added.

 

CNBC

Market Watch

Wall Street Journal

COVID-19 has been forcing accounting and finance teams to work remotely since last year, and that’s prompting reexaminations of how to use cloud technology for financial reporting in the future. A report, released last month by the Institute of Management Accountants and the financial technology company Workiva, surveyed approximately 200 financial reporting professionals on their experiences and found that before the pandemic, their organizations placed a fairly low priority on technology-based financial reporting solutions. Two-thirds indicated they were behind other internal teams in competition for resources, while about 30% of the respondents expressed interest in a technology-based solution for various activities around the documenting of management review processes and judgment areas. The survey respondents seemed to prefer new systems for two areas: control ownership and succession, and assessing revenue expectations. “The succession part is really where we’re really seeing some interest,” said Shari Littan, director of corporate reporting research and policy at the IMA. “One thing a cloud-based or collaborative platform can do is automatically assign who is going to oversee what and who is the second in command, someone else who can step in if that person is unavailable because during the pandemic more things are changing fast.”

 

Accounting Today

The heirs to the fortune of German manufacturing magnate Heinz Hermann Thiele may owe authorities more than €5bn ($6bn) in inheritance taxes, potentially the largest such bill in Germany’s history, according to ManagerMagazin. The magazine said Thiele's assets were supposed to be folded into a foundation to reduce tax risks, but that was not operational at the time of his unexpected death in February. Thiele’s manufacturing empire included a 59% stake in brake-system manufacturer Knorr-Bremse and half of railroad-equipment maker Vossloh. His worth was estimated at $20.2bn at the time of his death, according to the Bloomberg Billionaires Index

 

Bloomberg