Earlier this week, al-Reuters put the following story on the newswire about a major backdoor tax hike for the middle class in the $3.8 trillion budget unveiled by the White House:
NEW YORK – The Obama administration’s plan to cut more than $1 trillion from the deficit over the next decade relies heavily on so-called backdoor tax increases that will result in a bigger tax bill for middle-class families.
In the 2010 budget tabled by President Barack Obama on Monday, the White House wants to let billions of dollars in tax breaks expire by the end of the year — effectively a tax hike by stealth.
While the administration is focusing its proposal on eliminating tax breaks for individuals who earn $250,000 a year or more, middle-class families will face a slew of these backdoor increases.
The targeted tax provisions were enacted under the Bush administration’s Economic Growth and Tax Relief Reconciliation Act of 2001. Among other things, the law lowered individual tax rates, slashed taxes on capital gains and dividends, and steadily scaled back the estate tax to zero in 2010.
If the provisions are allowed to expire on December 31, the top-tier personal income tax rate will rise to 39.6 percent from 35 percent. But lower-income families will pay more as well: the 25 percent tax bracket will revert back to 28 percent; the 28 percent bracket will increase to 31 percent; and the 33 percent bracket will increase to 36 percent. The special 10 percent bracket is eliminated.
Investors will pay more on their earnings next year as well, with the tax on dividends jumping to 39.6 percent from 15 percent and the capital-gains tax increasing to 20 percent from 15 percent. The estate tax is eliminated this year, but it will return in 2011 — though there has been talk about reinstating the death tax sooner.
Millions of middle-class households already may be facing higher taxes in 2010 because Congress has failed to extend tax breaks that expired on January 1, most notably a “patch” that limited the impact of the alternative minimum tax. The AMT, initially designed to prevent the very rich from avoiding income taxes, was never indexed for inflation. Now the tax is affecting millions of middle-income households, but lawmakers have been reluctant to repeal it because it has become a key source of revenue.
Without annual legislation to renew the patch this year, the AMT could affect an estimated 25 million taxpayers with incomes as low as $33,750 (or $45,000 for joint filers). Even if the patch is extended to last year’s levels, the tax will hit American families that can hardly be considered wealthy — the AMT exemption for 2009 was $46,700 for singles and $70,950 for married couples filing jointly.
Middle-class families also will find fewer tax breaks available to them in 2010 if other popular tax provisions are allowed to expire. Among them:
* Taxpayers who itemize will lose the option to deduct state sales-tax payments instead of state and local income taxes;
* The $250 teacher tax credit for classroom supplies;
* The tax deduction for up to $4,000 of college tuition and expenses;
* Individuals who don’t itemize will no longer be able to increase their standard deduction by up to $1,000 for property taxes paid;
* The first $2,400 of unemployment benefits are taxable, in 2009 that amount was tax-free.
After being contacted by the White House — perhaps Our Lord and Savior Himself? — the story disappeared down the rabbit hole. Yanked by Yahoo, it stayed on Yahoo’s Canadian site until the next day, when it was yanked from there as well. It was replaced with the promise of an updated story later in the week, a story that never appeared.
From the Washington Compost site:
Here’s what appeared later:
No substitute story. You can still find the original story here.
What happened? Under normal circumstances, when there is an error in a story, corrections appear online, but the original story stays up with the corrections appearing either at the beginning or the end.
But the story isn’t yanked and sent down the rabbit hole, particularly in the wake of contact and the appearance of pressure from the White House or any other political figure.
It gets even more bizarre: the White House has managed to get Terri Cullen, the al-Reuters reporter who wrote the original story, fired:
No replacement story has emerged. Instead, the reporter is no longer with Reuters.
Now comes word from former Editor & Publisher editor Greg Mitchell that Cullen is now no longer working at Reuters, though the circumstances of her departure remain unclear.What brought about this retraction and loss of employment? Only Reuters and the former reporter, Terri Cullen, know the full truth, but the retraction took place after the White House complained.
Obama administration aides appealed to the Reuters White House reporting team to kill a story by another reporter of the news service that suggested the president’s new budget blueprint included “backdoor” tax hikes.The story claimed President Obama planned to let some of the Bush tax cuts expire and this was a backdoor tax increase on the middle class.
That’s no secret: the Bush tax rate reductions are due to expire at the end of 2010. Unless renewed, tax rates would return to the Clinton era, a huge backdoor tax increase on all Americans. Plus, there are proposals in Congress to make those increases retroactive all the way back to when they were first enacted. And, capital gains taxes will be allowed to return to Clinton-era levels, another huge tax increase on the creation of wealth.
All without a vote taken by the folks who put the “con” in Congress.
We’ve seen the President of the United States fire a private citizen from his job. We now see the power of the White House to get a reporter who writes something contrary to the wishes of the President and which unmasks the type of devastation His massive middle class tax increases will unleash on real Americans fired and to make that story virtually disappear except in cached parts of the Internet, the way-back machine.
By the way, once the government gets control of the Internet via net neutrality or nationalized broadband, it can make it go away completely.
Something you’d expect in some totalitarian regime, not in the Land of the Free and the Home of the Brave as well as the First Amendment.
You can feel the chilling winds blowing in the direction of any reporter for the state-run media who dares write anything that exposes The Messiah’s agenda for what it is.
Over at RDW, Fred correctly calls it another job lost courtesy of Obama.
