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Old Feb 02, 2010, 12:40 PM
Not THAT Ira
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Coupeville, Wa
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Obama Administration Anounces Huge Huge Middle Class Tax Hikes

Just kidding, they were actually very low keyed, quiet and sneaky about it.
Forgive the long copy/paste but the story is getting yanked from major media servers as I post so I figured I'd better get it up here quick....

By Terri Cullen
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NEW YORK (Reuters.com) --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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Old Feb 02, 2010, 12:45 PM
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"cut a trillion from the defecit over the next decade".... Well isn't that just great ! What a nice way of saying that Obama's goal is to get down to only 150% of Bush's worst defecit 10 years down the road.
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Old Feb 02, 2010, 12:52 PM
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hmmmmm.......I wonder why it's disappearing

/////////////////////////////////////////////////////////
Reuters Article on Obama's Tax Proposals Misses the Mark

Posted on February 2, 2010 by Gerald Prante

The popular Drudge Report website is linking to a Reuters article claiming that Obama's budget outlined on Monday would amount to "backdoor tax increases for middle-class families." Here's how the article starts off:

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.

What the article does not mention is that Obama's budget extends all of the Bush tax cuts for single returns making less than $200,000 and married returns making less than $250,000. Whatever you think of Obama's proposed budget and tax policies, this omission in an article entitled "Backdoor taxes to hit middle class" is either evidence of intentional deceit or terrible reporting.

The reporter also seems to not fully understand the alternative minimum tax. She writes:

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.

First off, Congress almost always passes an AMT patch retroactively, not in advance of the tax year. And to say that lawmakers have been reluctant to repeal it because it's a key source of revenue, such a statement is just wrong. Every year, lawmakers have patched it, and the current AMT revenue only amounts to about 2 percent of total income tax revenue, or less than 1 percent of total federal revenues...far from a "key revenue source." And the last sentence is just misleading as it implies a family making $48,000 is going to get hit by AMT without explaining that a tax return pays the higher of its alternative minimum tax and ordinary income tax.

Update: According to a new link on Drudge, Reuters has pulled this story.
http://www.taxfoundation.org/blog
////////////////////////////////////////////////////////////////////////////////



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Old Feb 02, 2010, 01:23 PM
Out of Time
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Originally Posted by imgumby View Post
What the article does not mention is that Obama's budget extends all of the Bush tax cuts for single returns making less than $200,000 and married returns making less than $250,000. Whatever you think of Obama's proposed budget and tax policies, this omission in an article entitled "Backdoor taxes to hit middle class" is either evidence of intentional deceit or terrible reporting.

imgumby
Since the article doesn't mention that little tidbit, why don't you tell us where YOU found it?
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Old Feb 02, 2010, 01:26 PM
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Originally Posted by Highflight View Post
Since the article doesn't mention that little tidbit, why don't you tell us where YOU found it?
Which "little tidbit" is that ?? Where I found it is in my OP...as always.

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Old Feb 02, 2010, 01:31 PM
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President Obama's Pledge Never to Raise Taxes on Anyone Making Less Than $250,000 a Year (0 min 21 sec)
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Old Feb 02, 2010, 01:33 PM
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"read my lips"

LOFL
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Old Feb 02, 2010, 01:39 PM
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If people are willing to readily consume lies concocted about "global warmist
alarmism" why shouldn't they also be willing to readily consume lies concocted
about anything not Republican ? keep in mind, this map _is_ invertible

It seems to me that a large percentage of the citizenry has relegated itself to
playing the role of putty in the hands of propagandists.
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Old Feb 02, 2010, 01:49 PM
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Originally Posted by peterp1964 View Post
If people are willing to readily consume lies concocted about "global warmist
alarmism" why shouldn't they also be willing to readily consume lies concocted
about anything not Republican ? keep in mind, this map _is_ invertible

It seems to me that a large percentage of the citizenry has relegated itself to
playing the role of putty in the hands of propagandists
.


Very well stated!
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Old Feb 02, 2010, 01:52 PM
Chillin till SEFF
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Originally Posted by peterp1964 View Post
It seems to me that a large percentage of the citizenry has relegated itself to playing the role of putty in the hands of propagandists.
Absolutely, and they all voted last time out
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Old Feb 02, 2010, 01:59 PM
Low, slow and dirty
maine
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Which ever way It goes. The wife and I will be paying far less, all due to nafta and our out of touch gov't ! I feel sorry for people who are making 60,000 and above . I feel big brother is going to reach into your pockets much more than mine, to pay for their out of control spending habit!
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Old Feb 02, 2010, 02:06 PM
Chillin till SEFF
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Originally Posted by jumpinjo View Post
I feel sorry for people who are making 60,000 and above . I feel big brother is going to reach into your pockets much more than mine, to pay for their out of control spending habit!
What?
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Old Feb 02, 2010, 02:20 PM
It's 5 O'clock Somewhere
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Originally Posted by jumpinjo View Post
Which ever way It goes. The wife and I will be paying far less, all due to nafta and our out of touch gov't ! I feel sorry for people who are making 60,000 and above . I feel big brother is going to reach into your pockets much more than mine, to pay for their out of control spending habit!
You are right. If they taxed the rich at 100% it still would not be enough to cover our spending. They have to come after the middle class and poor. There is no other option. There simply is not enough money to cover the spending going on.
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Old Feb 02, 2010, 02:44 PM
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I propose a 100% tax on all political campaign contributions... I have a feeling that would head off a lot in spending as well as raise a little new tax revenue
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Old Feb 02, 2010, 02:45 PM
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D B Cooper's Avatar
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...that and start collecting taxes from democrat politicians just like everyone else !
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