Revealed, but not a revelation: Middle class to get hit with “backdoor taxes” (UPDATE 3: REUTERS SAYS IT GOT STORY “WRONG,” WILL BE NO OTHER PIECE WRITTEN ABOUT THIS)

Update 1 – 11:17 AM: I had just gotten this post published when WH Deputy press sec. Bill Burton announced on Twitter that Reuters had pulled the story. Here’s a screencap of the new page:

The text:

The story Backdoor taxes to hit middle class has been withdrawn. A replacement story will run later in the week.

“Change” you can believe in!

Update 2 -11:36 AM: The story’s back up again at that same link. Hmm …

11:48 AM: Ok, I’ve figured it out. The link that Burton used to show that it had been “pulled” was slightly different than the link Drudge used. So the Drudge link still works with the full story but Burton’s link shows the new text.

Stay tuned …

Update 3 – 10:53 PM: In an update posted later today, Reuters made the following claim:

The Feb 1 story headlined “Backdoor taxes to hit middle class” is wrong and has been withdrawn.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.

Hmmm. I have a hard time believing that the veteran reporter Terri Cullen, who used to work for the WSJ, got this story so horribly wrong. A few news sites like, of course, the NYT, are saying, too, that Reuters got it wrong, but then again – it could be like “there are no death panels in the healthcare ‘reform’ bill” argument, where death panels aren’t literally in the bill but they are in other ways. Regardless of whether or not this particular story from Reuters was totally accurate or not, it has been documented multiple times through multiple outlets (link provided earlier in this post) that this administration can and will stick it to the middle class in various ways, including through VATs to pay for their big govt agenda. And let’s not forget a fact that is unassailable: Taxes will most definitely be raised on the “rich” – right here in the middle of a jobless “recovery,” and one that may carry us into a “double-dip recession” (a possibility that even the hailed economics “Nobel prize winner” Paul “Kruggie” Krugman admits is strong).


Startingly, the Obama-friendly Reuters news outlet has a detailed report outlining how the Obama administration plans to stick it to the middle-class with so-called “backdoor taxes,” this after candidate Obama promised not to “pay for the recovery” on the backs of anyone outside of “the rich”:

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.

Let’s also not forget the administration’s fascination with VATs as a way to “raise revenue.”

Not that this is exactly news or anything. The writing has been on the wall for months. As I’ve written before, you simply can’t have an as ambitiously liberal agenda as President Obama has without raising taxes on more than just “the rich.” In the eyes of a socialistic liberal, everyone must “pay their fair share” in order to pay for “what’s best for them” – even if they don’t know it yet.

But even though the tax hikes are not surprising, what makes my blood boil is how this administration has consistently refused to acknowledge that an expiration of tax cuts is indeed a tax hike. Their rationale is “well, the tax rate would go back to what it was before the tax cut, so that’s not really a hike” – as if that makes any bloody sense whatsoever. The administration has also pointed to the Bush deficits to suggest that tax cuts are bad for the economy, in spite of the fact that for roughly 6 years, in spite of the 9-11 attacks, the Bush administration enjoyed a fairly robust economy and, contra to the claims of this administration, tax revenue poured into the Treasury thanks in large part to Bush’s tax cuts. The problem with the Bush administration was that they didn’t have it in them to control spending.

Which is also a problem with this administration, on a much more deeper level – in addition to the fact that this administration, like most liberal administrations, never met a tax hike it didn’t like. Dangerous, considering that tax hikes on any “class group” in the middle of a troubled economy are bad news.

It reeks that in the middle of this nation’s jobless “recovery” that President Obama and his elite team of clueless wonders would continue to lie to the American people about where the money will come from to pay for his healthcare “reform” package, his cap and trade agenda, and a whole host of other big spending ticket items. Then again, their duplicity on the issue of taxes and spending, as well as on the issue of how many jobs they have “saved or created” is necessary in order to, well, continue to dupe Americans into believing that the “adults are in charge,” that this administration knows what it’s doing, when in fact they do not. And judging by the polls, more Americans are taking their blinders off and waking up from their post-Obama election slumber and figuring this out. So the lying and misrepresenting of the “facts” must continue.

And we must continue to stay vigilant and not let them get away with it.

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