Another Broken Promise: Tax Hikes for the Middle Class -Updated and Bumped

You didn’t really believe Obama when he promised not to hike taxes on anyone making less than $250K a year, did you?

Reuters: 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. ….

Ouch! That’s going to hurt. Not to mention the taxes on investment. Not to worry, though. Obama’s doing all he can to destroy the economy so there won’t be much of a middle class left by the time he’s through.

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This is weird: Reuters advises that the backdoor tax story has been withdrawn, but the link above still works. I’m not sure for how long. Strange, maybe they got a call from someone in the White House.

Find out what others are saying at memeorandum.

Update: Left Coast Rebel has screen shots of the yanked story. And then there’s this:

UPDATED: It is confirmed via TPM that the White House contacted Reuters and ‘suggested’ (forced) them to pull the middle class tax hike story. It was actually pulled at 8 p.m. last night just 4 hours after it ran. A spokeswoman for Reuters acknowledges that the White House contacted Reuters about the ‘inaccuracies’ of the report.

Memeorandum has a new thread, and here.

Update 2: Some say there are inaccuracies in the original Reuters article. We’ll have to wait and see, but I found this from John Boehner.

2. President Obama’s budget taxes too much. The President’s budget includes more than $2 trillion in tax hikes, with a nearly 20 percent jump in the first year alone.  This includes tax increases on small businesses, investors, and families earning less than $250,000 per year – a violation of the President’s campaign pledge.  The last thing American families and small businesses need right now are new taxes that make it harder to save, invest, and hire.

This entry was posted on Tuesday, February 2nd, 2010 at 4:21 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed.