Reuters Pulls “Backdoor Tax” Article; Still Found On Yahoo! Canada (UPDATE #2)

In the vein of “things that make you go hmmmm?”, Reuters ran a story yesterday which has been subsequently pulled.

I found the original on Daily Paul, tracked the second part of the story on Goldtalk Forum, and then found the entire story on Yahoo – CANADA. I find it very interesting that the story was pulled from the American news services, yet left on Canada’s.  All one has to do is read the story and realize that Obama is about to break yet another campaign promise.

How stupid do they think we are?

Here is the original story pieced together, and screenshots of the re-tracted article.  Finally, you will see a screenshot of the entire article on Yahoo! Canada. (There is a zoom feature on the photos, click to enlarge, and click and drag to move the images.)

Mon Feb 1, 4:09 pm ET

Backdoor taxes to hit middle class
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.

Pulled Story on Yahoo!
Retraction on ABC News
Backdoor Tax Story on Yahoo! Canada
Entire Story on Yahoo! Canada

How’s that Hope and Change working out for ya?

UPDATE: 2/2/2010:

ADVISORY: Backdoor taxes story

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.

Next question? It’s 4:11pm est, 2/2/2010, and the story is still up on Yahoo Canada. What’s up with that, if the story is so inaccurate?

UPDATE #2:
It’s 8pm est. and the story has hit the Washington Post. I checked the Yahoo! Canada page and it has been pulled also.

From The Washington Post:
Reuters’ ‘Backdoor taxes to hit middle class’ story withdrawn after White House complaint

By Rachel Weiner
The White House succeeded Monday night in getting Reuters to pull an unfavorable, inaccurate story about tax policy that had been featured on the Drudge Report.

The story claimed that the Obama administration planned to reduce the deficit by allowing middle class tax cuts to expire. Hours later the story was taken offline, replaced with a notice explaining that the facts were wrong. The note initially said that a replacement version would come out later this week; it was later revised to say that “there will be no substitute story.” Wrote Reuters:

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.

The story was taken down Monday night, but still led the conservative Drudge Report at 11:30 a.m. Tuesday. Later, the website added that it had been pulled.

White House Deputy Press Secretary Bill Burton tweeted about the incident.

A White House official told Talking Points Memo that they reached out to Reuters to point out factual errors in the piece.

“The story went out, and it shouldn’t have gone out,” said Courtney Dolan, a spokeswoman for Reuters. “It had significant errors of fact.”

An official told TPM that Reuters’ White House team “worked to quickly remedy the situation and helped get the story completely withdrawn.”

By Rachel Weiner | February 2, 2010; 5:23 PM ET

10 thoughts on “Reuters Pulls “Backdoor Tax” Article; Still Found On Yahoo! Canada (UPDATE #2)

  1. Anybody paying attention has got to know that the middle class will have all kinds of taxes coming our way. There is no way to pay for all of this without taxing anything and everything.

    If the goal is to have us all dependent on Gov. have any of these genius figured out who is going to pay, no income no way to collect income tax.

    They lie and than lie to try to fix the first lie. We are not stupid contrary to what they have said, that was a mistake on their part. They must of really believed we could not figure anything out, poor move on their part.

    The fog has lifted and maybe there are those at either end, the receivers of the the goodies and the rich with ways to hide their income that are ok with this but the ones in the middle are not. They underestimated the pissed off factor and it is only getting stronger.

      1. Sure, the AEI is full of brilliant neocons. It seems the Reuters story was pulled because it was inaccurate in a few details.

  2. The facts in the article were inaccurate. What does it matter how quickly they pulled it? The fact that it was pulled is a good thing.

Comments are closed.

Bad Behavior has blocked 1318 access attempts in the last 7 days.