Word: deducting
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Buried in the budget bill passed by Congress last week was a provision that will have a profound impact on U.S. business ties with South Africa. On Jan. 1, American firms will no longer be able to deduct taxes paid to the South African government from their U.S. tax bill. That will be a costly blow to the 163 U.S. companies, including Mobil and Union Carbide, that still operate in South Africa. Taxes will consume an estimated 72% of the money that U.S. firms earn in South Africa, vs. 57.5% before the new law. The rise is likely to speed...
...structure, which does more to reward consumption than almost any other system in the world. The Government taxes savings twice: first as income, then again on the interest that the money earns in the bank. At the same time, the U.S. has historically encouraged borrowing by allowing consumers to deduct the interest they pay on installment debt. "Certainly there was no excuse for allowing this," declares Economist Rudolph Penner of the Urban Institute. That provision, which made it easier for taxpayers to rationalize running up big balances on their credit cards, is being phased out under the 1986 tax-reform...
FOOTNOTE: *Since damage lowers the value of an investment, owners can deduct the amount as a capital loss...
...recent bid on the DeWolfe St. property about to be put for lease by St. Paul's Church. While Harvard's $4 million offer appeared to provide for the low-income housing, the University in fact asked the church to fund the project. Harvard said it would automatically deduct $1 million from its offer if low-income housing were to be built there...
...reform eliminated interest deductions on most forms of consumer credit except for loans on first and second homes, but the lawmakers left a large loophole for wealthy seafarers. Yacht owners can still treat their floating pleasure palaces as second homes if they contain a head and a galley (toilet and kitchen, to landlubbers) and sleeping facilities. Skippers can deduct the interest on loans used to buy their craft or obtain a yacht-equity credit line to cover the purchase of, say, a Rolls-Royce. "Aristotle Onassis would have loved this," fumes Republican Senator John Danforth of Missouri, a member...