wealth tax

Week in Insights: The Value of Getting and Staying Connected

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When I was a little girl, I had three best friends: Nancy Drew, Trixie Belden, and Laura Ingalls. I caught up with them every few weeks courtesy of our county bookmobile. If you don’t know, a bookmobile is a public library branch on wheels that visits U.S. counties—largely poor and rural like mine—that didn’t have easy access to a library building. Our bookmobile looked like a giant bus and would set up in a parking lot for about an hour. To gain entry, all we needed was a library card.

Bookmobile day was my favorite day. No other day came close—not even Christmas. It was my chance to be connected to the world, and I couldn’t imagine anything better.

When I got a little older, I heard whispers that a real, bona fide library was coming to town. It was like hitting the lottery. Once it opened, I was there every chance I could get. Ms. Pat, our librarian, would hide new books behind the desk that she thought I might enjoy so I could get them first (it’s okay, I can tell that story now that she’s retired). For a poor, geeky kid like me with big dreams, it was a wonderland.

A student walks down the stairs in a staircase of the “Informations-, Kommunikations- und Medienzentrum (IKMZ) library in Cottbus, eastern Germany, on May 17, 2017.

Photographer: TOBIAS SCHWARZ/AFP via Getty Images

I am forever grateful that I was lucky enough to have access to those resources. They changed my life.

I still love libraries. And while I prefer the feel of a paper book, I confess that my current lifestyle makes it more likely that I’ll grab an e-book. The same library card that lets me check out a hardback book allows me to digitally check out e-books and audiobooks.

Whether pivoting from bookmobiles to brick and mortar or from paperbacks to digital content, libraries are always adapting to their communities. April 3–9, 2022 is National Library Week, and the theme this year is “Connect with Your Library.” The idea is that libraries are places to connect in all kinds of ways—from books, to technology, to media, to communities. That’s pretty powerful.

I can’t help but be awed with that idea—and what libraries have done for readers like me. They gave me access to the world.

That’s what we strive to do at Bloomberg Tax, too. This week, as always, our experts help you stay informed with great commentary and insightful analysis on federal, state, and international tax issues. Our coverage also includes valuable commentary and podcasts, as well as covering tax moves across the globe. And starting next month, we’re reintroducing our popular lunch-and-learn series. It’s all part of our commitment to helping you get—and stay—connected.

The Exchange… It’s where great ideas intersect.

—Kelly Phillips Erb

Quick Numbers Trivia

Before the pandemic, a Gallup poll found that visiting the library was Americans’ most common cultural activity. How many trips, on average, did U.S. adults report taking in 2019?

Answer at the bottom.

Our Roundup

This week, our experts touched on a wide range of topics, from tax fraud to virtual reality. For a look at what’s making news, here’s our roundup:

The prevalence of becoming a victim of tax fraud in the digital age has increased exponentially. In Five Ways to Avoid Becoming a Victim of Tax Fraud This Tax Season, Secure Anchor Consulting founder Eric Cole shares five ways to avoid falling prey to hackers.

The U.K. is introducing a plastic packaging tax. In Plastics Taxes Driving New Environmental Policies, Kate Barton of EY looks at the different policies and taxes that governments use to address the production, use and disposal of plastics, and what this means for the corporate tax function.

As the metaverse grows in popularity, more events will shift to virtual reality. In VAT and the Metaverse—Taxing Virtual Events, Aleksandra Bal of Stripe explains the EU VAT consequences for events taking place entirely in the metaverse.

When hiring a new accountant for your firm, it’s important to go deeper than the usual, generic questions related to past work experience. In Ask These 3 Interview Questions to Hire the Best Accountant for Your Firm, CMA Exam Academy’s Nathan Liao shares three questions to help you stay strategic when searching for the right applicants.

In Capital Gains Tax Imposed on Disposals of Shares in Nigerian Companies, Stephen Chima Arubike and Athanasius Akor of G. Elias & Co. examine the reintroduction of capital gains tax on disposals of shares in Nigerian companies and discuss some potential issues raised by this change.

The lack of regulation and accounting guidance on cryptocurrency has produced a market that some have termed the Wild West, say Stout’s Fotis Konstantinidis and Ashley Ross. In The Wild West: Valuing Cryptocurrency During a Time of Volatility, they note the need to understand cryptocurrency as an asset, relevant accounting standards (or lack thereof), and valuation strategies.

A woman pose for a photo in front of photowall with motiv of a phantasy library at the 2013 Frankfurt Book Fair on October 9, 2013 in Frankfurt, Germany.

Photographer: Thomas Lohnes via Getty Images

Commentary

Assumptions about domestic violence are that abuse is physical or sexual, but abusers can establish and maintain power over a survivor’s finances as well. Tax preparers and tax professionals should move quickly to familiarize themselves with the issue of economic abuse, says Urban Resource Institute’s Teal Inzunza in Tax Professionals Must Look Out for Economic Abuse Each Tax Season.

Women’s History Month is a time to celebrate the role models who inspire us, to honor those who paved a path, and to recognize that we have more to do to advance true equity. In “So I Might Say Our Victory Is Just Beginning,” Marna Ricker, EY’s Americas vice chair of tax services, speaks to the importance of lifting up those around us and opening the door for increased inclusion.

In his upcoming budget, President Joe Biden proposes reviving the wealth tax, a concept popularized by his rivals in the Democratic presidential primary two years ago. The proposal—now dubbed the “Billionaire Minimum Income Tax”—includes a few improvements over the 2020 version. Nonetheless, writes Karl Smith in Biden Billionaire Tax Would Hurt Long-Term Investors, it remains a convoluted mess whose primary benefit could be achieved by simply eliminating a loophole in the current tax code.

A Closer Look

Changing settlement language sometimes doubles what a plaintiff keeps without any cost to defendants, and language can reduce taxable income, increase deductions, defer tax liability, and even secure a tax subsidy. But tax strategies can fail when defendants object. In the March 2022 edition of “A Closer Look,” Lane Powell PC’s Jeremy Babener; Don Engels of Ringler Associates, Inc. and the Settlement Tax Group; and C&L Value Advisors’ Deborah Hresko share the importance of plaintiff tax strategies, defendants’ role in effecting those strategies, why defendants object, and how to overcome their objections.

Columnists

A recent proposal to require all Americans to pay income taxes has many wondering about who pays tax, and how much tax gets paid. This week, I take a look at some taxpayer statistics and historical context to consider as part of the discussion.

Listen In

The OECD released a draft framework on March 22 to standardize how global tax authorities regulate and share tax information related to cryptocurrency assets. The draft—called the Crypto-Asset Reporting Framework, or “CARF”—includes model technical rules and a commentary written for broad adoption and data-sharing among tax administrations. In this week’s episode of Talking Tax, Bloomberg Tax correspondent Shaun Courtney speaks with Buchanan Ingersoll & Rooney PC international tax attorney Sahel Assar about the draft proposal.

Supporting gender equality within the global tax accounting and legal industries is essential. This month, female…

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