No Tax Left Behind

No tax left behind
By Michelle Malkin • February 2, 2010 10:39 AM
Cha-ching:
While President Barack Obama is proposing to cut some taxes for companies that hire workers, his budget would raise a host of other taxes on businesses and wealthy individuals.
The budget proposal released Monday would extend Obama’s signature Making Work Pay tax credit — $400 for individuals, $800 for a couple filing jointly — through 2011. But it would also impose nearly $1 trillion in higher taxes on couples making more than $250,000 and individuals making more than $200,000 by not renewing tax cuts enacted under former President George W. Bush. Obama would extend Bush-era tax cuts for families and individuals making less.
Obama revived numerous proposals for business tax increases that didn’t fare well in Congress last year, including a scaled-down plan to increase taxes on U.S. companies with major overseas operations, and plans to increase taxes on oil and gas companies.
In all, Obama would increase taxes on some businesses and wealthy individuals by a total of about $1.4 trillion over the next decade, while cutting taxes for middle-class workers and other businesses by about $330 billion. The bottom line: Tax receipts would increase by about $1.1 trillion over the next decade.
Roy Cordato weighs in on the tax hike on drilling:
One well-publicized element of President Obama’s proposed budget is the elimination of “subsidies” for fossil fuels. But, in large part, these are not subsidies at all. One proposal relates to the tax treatment of oil-company incomes. According to the New York Times, Obama proposes to eliminate the expensing of what are called intangible drilling costs. These represent about 70 percent of all drilling costs and are made up of labor, supplies, contractors, and fuel. Under current law, oil companies can write off the expenses against other income in the year that those expenses are incurred, rather than depreciating them over time. In reality, to allow expensing of these payments is not a subsidy. It avoids the imposition of a tax penalty on oil drilling and is an example of how all production costs should be treated by the tax code…
So Obama, in proposing to eliminate expensing of these drilling costs, is not abolishing a tax subsidy, but is imposing a tax penalty. And, given his often-articulated disdain for fossil fuels, he is probably quite aware of this fact.
Backdoor taxes on the middle-class:
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).

To read the complete article, click on this link
http://michellemalkin.com/2010/02/02/no-tax-left-behind/