Hat Tip: Brian B.
by Nancy Matthis at American Daughter
Rumor has it the White House told Reuters to scrub the details of the middle class tax hit. Here’s a screenshot of the sanitized page. Usually we don’t copy entire articles from news sites, but abide strictly by “fair use.” However, just in case this information could be lost, we are going to make an exception here. We pulled this copy from a surviving Canadian site. [Note: Within moments of our taking the copy, the Canadian site was also scrubbed.]
Backdoor taxes to hit middle class
Mon Feb 1, 4:09 PM | By Terri Cullen
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.
Bookworm Room – Help wanted regarding immigration statistics
The New Editor – Chris Matthews: ‘You Say Repub, I say Khmer Rouge…’
The New Editor – Who is More Embarrassing to the Irish race?
The New Editor – How To Report The News
Political Wire – Palin Wants Rahm Fired… Developing…
Philly.com – Early Draft of Constitution found in Philadelphia
The Washington Times – Liberties oversight panel gets short shrift
Pittsburgh Post – 6 more weeks of winter
NY Daily News – Cops bullied victims in bid to bolster claims of ‘crime drop’
Jules Crittenden – Give My Regards To Blogway … (Hat Tip: Larwyn) Get well Jules and hurry back…
Mark Steyn – STEYN: Talking the talk (Hat Tip: Larwyn)
Gateway Pundit – Rush Limbaugh: Adam Andrzejewski Is the “Scott Brown of Illinois” (Hat Tip: Larwyn)
Gateway Pundit – Leading Democrat: “We’ve Got to Spend Our Way Out of This Recession” (Video) (Hat Tip: Larwyn)
WSJ – The Obama Spell Is Broken (Hat Tip: Brian B.)
Yahoo! News – Sarah Palin endorses Rand Paul in Ky. Senate race (Hat Tip: Brian B.)
Google – Quo Warranto is being filed today in DC (Hat Tip: Brian B.)
The Washington Post – Tebow’s Super Bowl ad isn’t intolerant; its critics are (Hat Tip: Steve Schippert)
Fox News – Murtha in ICU After Surgery ‘Complications’
Fox News – Somalia’s Al Shabaab to Ally With Al Qaeda
Bob McCarty Writes – Politicians Should Donate Their Brains to Science
Bob McCarty Writes – Costly Proposed Air Standards Lack Scientific Basis
Bob McCarty Writes – Overwhelming Majority Say ObamaCare ‘Unfair’
Bob McCarty Writes – Ad Prompts Questions About Commander-in-Chief
Townhall.com – Obama Labor Board Nominee, “workers should not be able to choose against having a union” (Hat Tip: Brian B.)
Coyote Crossing – This is the title of a typical incendiary blog post (Hat Tip: Mudville Gazette)
WND – Dem panic! Anti-tea-party ads tied to Obama eligibility (Brian B.)
Yahoo! Finance – Obama seeks 12 percent budget increase for SEC (Hat Tip: Brian B.)
Pierre Legrand’s Pink Flamingo Bar – The Backdoor Man Scrambles Around Taking This And That Down…Hey Backdoor Man, Ya Missed One! How The Obama Administration Operates and Why The Tea Party Is So Pissed Off!
The Radio Patriot – Does a bear…?
Michelle Malkin – No tax left behind
Gateway Pundit – We’ve Heard This Before– Obama and His Taxpayer Monopoly Money
ThreatsWatch – How can bin Laden, domestic terrorism and the QDR be funny?
GATA – David Reilly: Secret banking cabal emerges from AIG shadows (Hat Tip: Brian B.)
New York Post – Obama’s got real trouble at home (Hat Tip: Brian B.)
The 9.12 Project Network – Saul Alinsky, the NEA, Rules for Radicals, Lucifer, & Rush Limbaugh (must-read)
Family Security Matters – Team Obama vs. the All-Volunteer Military
Family Security Matters – 1776: Victory or Death?
One Old Veteran – President cuts border security budget (Hat Tip: Carolyn Cooke)
Riehl World View – Obama’s Budget Includes Cap-And-Trade Placeholder (Hat Tip: Larwyn)
Atlas Shrugs – THE MUFTI’S DIARY ON HIS MEETING WITH HITLER
Atlas Shrugs – Free World Leader: Lech Walesa, “The world has no leadership. The US was always the last resort and hope for all other nations.That was the hope, that whenever something was going wrong, one could count on the United States. Today we lost that hope.”
Obama budget sets strategy for fall campaign (Hat Tip: Brian B.)
Largest-ever federal payroll to hit 2.15 million (Hat Tip: Brian B.)
“In a country like America where riots occur during brownouts, and people stab each other for cutting ahead in service station lines during gasoline shortages, one has to wonder how our society would react to a total disruption of its artificial life-support system. In researching magazine articles I’ve interviewed urban disaster planning authorities who are more skeptical about saving their citizens from major civil disruption than Mel Tappan ever was.” – Massad Ayoob, in “The Truth About Self Protection“