Reuters ran a story that they titled, “Backdoor Taxes To Hit Middle Class.” The Obama administration whined, pleaded, threatened, and intimidated Reuters to the point that Reuters took the story down.
Fortunately, the International Business Times is running pretty much the story under the same title:
By Terri Cullen
01 February 2010 @ 06:16 pm ET
Next Politics & Policy Article
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.
Notwithstanding that punishing the rich actually punishes the poor by punishing economic growth (the poor get their jobs because the rich create them, rather than vice versa), it was always a lie that Obama was only going to tax the rich. People like me were pointing that out throughout the 2008 election campaign.
A couple examples:
That Obama’s promise to tax only the rich was such a transparent lie that even the biased leftist New York Times reported on it. The final paragraph in their article entitled, “Obama’s Pledge to Tax Only the Rich Can’t Pay for Everything, Analysts Say” reads as follows:
“There is no way we can pay for health care and the rest of the Obama agenda, plus get our long-term deficits under control, simply by raising taxes on the wealthy,” said Isabel V. Sawhill, a former Clinton administration budget official. “The middle class is going to have to contribute as well.”
The Wall Street Journal expressed the same point better (as usual) in analyzing Obama’s tax and spend demagoguery:
This is going to be some trick. Even the most basic inspection of the IRS income tax statistics shows that raising taxes on the salaries, dividends and capital gains of those making more than $250,000 can’t possibly raise enough revenue to fund Mr. Obama’s new spending ambitions.
The WSJ goes on to say:
as a thought experiment, let’s go all the way. A tax policy that confiscated 100% of the taxable income of everyone in America earning over $500,000 in 2006 would only have given Congress an extra $1.3 trillion in revenue. That’s less than half the 2006 federal budget of $2.7 trillion and looks tiny compared to the more than $4 trillion Congress will spend in fiscal 2010. Even taking every taxable “dime” of everyone earning more than $75,000 in 2006 would have barely yielded enough to cover that $4 trillion.
We voted for a liar based on the huge pack of lies he offered us.
If you actually believed Obama’s “hope and change” that you would be able to get a free ride as Someone Else picked up your tab forever, you are a genuine fool.
Joe Biden summed up the Obama populist demagoguery by suggesting that paying excessively high taxes was the “patriotic duty” of the rich – which basically means that the middle classes and the poor either aren’t patriots or that they have no patriotic duties.
Liberals talk about “fairness,” as though its somehow “fair” that nearly half the country pay should pay no federal income taxes at all, while 1% of the American people should be compelled to pay 40% of all federal income tax. They think it’s “fair” that the top 1% of earners pay more in taxes than the bottom 95% of Americans COMBINED.
This is America, where you have the right to sit on your fat ass while someone else works for the bon bons you stuff in your face while you vegetate in front of the boob tube. Why SHOULD you work when you can saddle that burden on Someone Else?
Rich people study harder in their formative years. They postpone prosperity longer to pursue more college education. They work longer hours. They save more. They pursue jobs that are more demanding and more stressful. They invest when others consume, and then consume some more, and then some more. And when they finally start to achieve, Mr. or Ms. bon bon feels entitled to confiscate their prosperity and redistribute it to the do nots.
And that’s “fair.”
Well, under Obama, your “fairness” is going to come home to roost.
Obama is considered “anti-business” by a whopping 77% of investors. whose investments stimulate economic growth. Obama has gone to war with the U.S. Chamber of Commerce whose businesses create jobs. Obama has gone to war with the banks that lend money to businesses.
Many businesses simply afraid to hire new workers because of Obama’s new taxes and rules, and the sheer atmosphere of doubt that he’s created.
We are descending into a command-and-control economy with the government pulling the strings, according to a study. And that is going to have severe consequences.
On top of Obama’s approach of punishing and discouraging businesses and investment, Obama took the Democrat Marxist-based economic philosophy of redistributionism and ran with it so far down the field that we could never hope to pay for it by taxing the rich even if we sucked them all dry.
Obama is spending vastly more money as a percentage of GDP than FDR ever did. All of this spending is doing little to stimulate the economy (and what little it IS doing is both artificial and temporary), and the American people are going to have to pay dearly for all this never-before-seen-in-the-history-of-the-human-race spending very shortly down the road.
Now Mr. Middle Class and even Mr. Minimum Wage is going to have to pay for Obama’s massive government excesses, too. Or else the whole Ponzi scheme we call our federal government will fall apart.
This hearkens to the words of Michelle Obama:
“Barack Obama will require you to work. He is going to demand that you shed your cynicism. That you put down your divisions. That you come out of your isolation, that you move out of your comfort zones. That you push yourselves to be better. And that you engage. Barack will never allow you to go back to your lives as usual, uninvolved, uninformed.”
I see those words, “Barack Obama will require you to work,” and I see a bunch of communist proletariats in a mandatory labor pool squatting over their forced labor.
I came across an article entitled, “A New Slavery: Forced Labor, the Communist Betrayal of Human Rights.” Oh oh. Barack Obama isn’t the first Marxist who ever decided to “require you to work.”
Obama has created such gigantic deficits through his gigantic “government as God” approach that we will have unsustainable trillion dollar deficits through 2020.
“Barack Obama will require you to work,” Michelle Obama assured us. “Barack will never allow you to go back to your lives as usual, uninvolved, uninformed.”
That means no more boob tube and bon bons for you, Obama voters. Get off your fat, lazy, worthless asses and work off your Dear Leader’s deficits.
Don’t wait for Obama to start a forced labor camp in your neighborhood. “Move out of your comfort zones” and start one of your own. Maybe you cold begin by collecting your family’s feces to produce Toebee (compost) like the other Dear Leader requires his people to do in North Korea.
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