Tax Breaks

WASHINGTON -- One of the top items on President Obama's to do list -- a 10% tax break for small businesses that make new hires -- got tangled in an election-year tax debate as Republicans led a filibuster to block the measure. The legislation would have provided the tax credit to companies that hire new employees or otherwise expand their payrolls this year, a typically popular approach among the GOP. Republicans in the Senate did not necessarily object to the measure, but they protested Thursday after Democrats refused to allow votes on other amendments.

WASHINGTON — Senate Democrats are trying to put a check mark next to one of the economic initiatives on President Obama's to-do list: a 10% small-business tax break for companies that expand payrolls. The Senate overwhelmingly advanced the measure Tuesday, clearing a procedural hurdle on a bipartisan 80-14 vote. But it is likely to run into resistance later in the week as Republicans seek to tack on more controversial amendments, including those that would repeal the nation's healthcare law or extend the tax breaks enacted during the George W. Bush administration that expire at the end of the year.

High-profile developer Rick Caruso got his long-standing wish Tuesday: a tax break that could be worth more than $15 million for knocking down Montecito's dilapidated Miramar Hotel and building a luxury resort on the star-crossed site. An eyesore whose boarded-up cottages and weedy lots have irritated neighbors for years, the Miramar was a chic destination in its day. Its last guests left 12 years ago; but even a string of celebrity owners, such as hotel mogul Ian Schrager and Beanie Baby billionaire Ty Warner failed to revive it. Caruso, developer of The Grove shopping center in Los Angeles and a possible mayoral candidate, has owned the property since 2007, shelving his development plans when the economy soured.

After complaints from Los Angeles County assessor's office employees worried that their boss may have extended improper tax breaks to prominent campaign contributors, state Assemblyman Mike Gatto decided to introduce a bill to curb such practices. So he was shocked when Assessor John Noguez - whose alleged misdeeds inspired the proposed reform - beat him to the punch with a news release declaring his enthusiastic support for the bill, before it had been posted on the Legislature's website.

Los Angeles County prosecutors are examining large property tax breaks extended to the owners of the Old Spaghetti Factory, the now-closed Hollywood landmark, as part of their influence-peddling investigation of Assessor John Noguez. Prosecutors are also looking at more than a hundred Westside properties whose owners got secret, improper tax reductions from a former assessor's office employee who said he broke the rules hoping to generate contributions to Noguez's campaign account.

WASHINGTON -- Despite a veto threat from President Obama, the House approved a business tax break that critics say would add $46 billion to the deficit and do little to create jobs. The 20% break for companies with fewer than 500 employees drew overwhelming support from Republicans as a boost to the economy, but was attacked by Democrats as favoring wealthier business owners, celebrities and sports teams. The vote was 235-173. The showdown comes after Republicans earlier this week in the Senate shot down Obama's proposed "Buffett rule" for taxing millionaires, and reflects the parties' competing visions for how best to address the nation's fiscal and economic issues heading to the fall election.

Presumptive GOP presidential nominee Mitt Romney kicked around a few tax-reform ideas while speaking to major donors in Florida on Sunday, the Wall Street Journal reported Monday. One suggestion hit the audience where it really hurt: wiping out the deduction for interest paid on some home mortgages. That would be mortgages on a high-income person's second home -- for example, the cabin in Lake Tahoe or the pied-a-terre in Manhattan. Ouch. That's likely to raise a few billion dollars for the Treasury, right?

The nearly $200,000 tax break that Los Angeles County Assessor John Noguez's staff extended to a generous campaign contributor is the only one of its kind in years, a county spokesman said. Prominent real estate executive Jordan Kaplan paid $21.5 million for a seven-bedroom Pacific Palisades mansion in August 2010. But nearly two years later, the assessor's office has still not taken the typically routine step of replacing the previous assessed value of the property, $11.5 million, with the new sales price.

Upset about high gasoline prices? So are the folks in Congress -- they just have a different way of showing it. As Time staff writers Lisa Mascaro and Christi Parsons reported Thursday: “The Senate blocked an effort to end billions of dollars in tax breaks for the oil industry, brushing aside President Obama's argument that the five big oil companies were doing 'just fine' while consumers were struggling with painfully high gasoline prices.”...