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Weekly Round-Up: 3/25-3/29

Accounting Jobs

Facebook’s Mark Zuckerberg faces $1 billion tax bill

According to CNN, Facebook’s stock market debut left founder and CEO Mark Zuckerberg with a paper fortune currently valued at $13 billion — and a 2012 tax bill of around $1.1 billion.

Zuckerberg’s whopping tax hit stems from his move last May to increase his stake in Facebook. On the day of Facebook’s initial public offering, Zuckerberg exercised a stock option and purchased 60 million Facebook shares at a “strike price” of 6 cents each.

Xerox Names ADT’s Kathryn Mikells as Chief Financial Officer

As reported by Bloomberg News, Xerox Corp. (XRX), the printer and copier pioneer, hired Kathryn Mikells as its chief financial officer, choosing an executive with experience across diverse industries as it broadens its services.

Mikells, 47, joins Xerox on May 2 from home-security provider ADT Corp., where she was also CFO, according to a statement yesterday. She has worked in the same post at Nalco Holding Co., a water-treatment and energy-technology company, and at former United Airlines parent UAL Corp.

Risk Is Back: America’s Big Banks Are Knee-Deep In Derivatives

According to Goldman’s 10-K (footnote 7 on page 139), “…gross fair values…exclude netting and receivable balances…and therefore are not representative of the firm’s exposure.  Notional amounts…provide an indication of the volume of the firm’s derivative activity; however, they do not represent anticipated losses.”  That’s great for Goldman, unless counterparties can’t pay because of unforeseen circumstances (remember how AIG was a huge Goldman counterparty before taxpayers bailed it out)?

These latest notional figures are really big (in fact, they’re bigger than they were in 2007-08) and time has proven that derivatives can, and do, blow up in unbelievably spectacular ways due to the inherent leverage in these products. Read more from Forbes.

Is Republican Tax Policy Undermining Tax Reform?

According to The Fiscal Times,  The proliferation of tax deductions and credits blurs the distinction between direct government spending and tax cuts. Politically, this is important because Republicans insist that there is a fundamental difference between keeping one’s own money via a tax cut and receiving a check from the Treasury. But in the case of refundable tax credits there is literally no distinction; they are exactly the same thing.

Moreover, Republicans continue to complain about the fact that close to half of all tax filers have no tax liability – the foundation of Mitt Romney’s remark about 47 percent of Americans being dependent on government. Yet it is Republican tax policy that is primarily responsible for this phenomenon.


Accounting Principals

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