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Why would Reuters pull this story?

Backdoor Taxes to Hit Middle Class

Earlier today, Reuters ran a story with the preceding headline. Then, suddenly, it was gone.

Poof!

Imagine that. A story that confirms yet another broken promise by President Barack Hussein Obama removed from public view.

Is this censorship? Did the propaganda ministry in the White House black list the story? No explanation from the news agency certainly leads the mind to wonder.

Fortunately, the folks at ShowbizGossips posted the story before the censors decided bad press for Obama isn’t allowed. We’ll repost it here in case they feel the Propaganda Ministry pinch too. Here’s the post Reuters (and the Obama administration?) didn’t want you to see!

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
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February 2, 2010 - Posted by | Obama, Taxes | , , , , , , , , , ,

6 Comments »

  1. Social comments and analytics for this post…

    This post was mentioned on Twitter by DumpMarionBerry: Why would Reuters pull this story?: Backdoor Taxes to Hit Middle ClassEarlier today, Reuters ran a story wit… http://tinyurl.com/yac4kdl

    Trackback by uberVU - social comments | February 2, 2010 | Reply

  2. Great job. This is why Sunstein wants to do away with the second amendment.
    Heads up folks: look for the new 9-11 very soon.

    Comment by christians for truth | February 2, 2010 | Reply

  3. this is only the start ofsocialism by bho we are in big trouble

    Comment by wally | February 2, 2010 | Reply

  4. Reuters published this ADVISORY:

    The Feb 1 story headlined “Backdoor taxes to hit middle class” is wrong and has been withdrawn. The story said lower-income families will pay more under tax provisions scheduled to expire Dec 31. The Obama administration’s budget calls for the extension of those tax provisions for households earning less than $250,000. There will be no substitute story.

    Comment by M. Tramill | February 2, 2010 | Reply

    • I have read the budget outline and it does not specifically call for the extension of those provisions for households earning less than $250,000. In fact, it only specifically addresses the limitation of the 28% tax rate for itemized deductions on those making more than $250,000. READ OBAMA’s BUDGET OUTLINE!

      According to The Heritage Foundation, if the Bush tax cuts are allowed to expire on December 31 of this year:

      • Tax rates will rise substantially in each tax bracket, some by 450 basis points;
      • Low-income taxpayers will see the 10-percent tax bracket disappear, and they will have to pay taxes at the 15-percent rate;
      • Married taxpayers will see the marriage penalty return;
      • Taxpayers with children will lose 50 percent of their child tax credits;
      • Taxes on dividends will increase beginning on January 1, 2009;
      • Taxes on capital gains will increase, also beginning on January 1, 2009; and
      • Federal death taxes will come back to life in 2011, after fading down to nothing in 2010.

      Obama’s outline makes no mention of whether the Bush tax cuts will expire or won’t. But with his reputation and his penchant for spending and breaking promises, I’d bank on his allowing them to expire, or at least not fighting too hard to keep them.

      Comment by John Allison, III | February 2, 2010 | Reply

  5. Okay, for those of you who believe BHO’s BS, take a look at the individual vs corporate income tax receipts for budget years 2011-2020 on page 12 of Obama’s proposed budget.

    Budget Year Individual Income Tax Receipts (Billions) Corporate Income Tax Receipts (Billions)
    2011 1,121 297
    2012 1,289 356
    2013 1,386 371
    2014 1,470 408
    2015 1,542 366
    2016 1,604 388
    2017 1,659 388
    2018 1,709 384
    2019 1,753 383
    2020 1,791 385

    That’s a 60% increase in annual individual tax receipts over the next 10 years, vs. a 30% increase in corporate tax receipts over the same period.

    It sounds like Obama either intends to dramatically boost individual income tax rates over the 10 year period, or doesn’t expect corporations to fare very well in the coming decade.

    If we are forced to endure the President’s policies, both may well prove to be true.

    Comment by John Allison, III | February 3, 2010 | Reply


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