by bintangkecil on Thursday, March 18th, 2010 | Business, News | No Comments

Honda has recalled 344,000 Odysseys and 68,000 Elements from the 2007 and 2008 model years over concerns of brake failure, according to several news reports.

Honda’s announcement is nothing in comparison to Toyota’s recall of 8.5 million vehicles. Although its part of a growing number of automaker concerns about the possibility of faulty brake systems.

The issue is caused by air flowing into the hydraulic brake lines when the vehicle stability assist modulator performs a self-test on start-up. Once this air builds up, it makes brakes less responsive, requiring a harder push to get the vehicle to stop.

The problems with uncontrolled acceleration acceleration seem to not be limited to Toyota. As Bloomberg noted yesterday, American automakers may also have had brake issues.

U.S. regulators have tracked more deaths in vehicles made by Ford Motor Co., Chrysler Group LLC and other companies combined than by Toyota Motor Corp. during three decades of unintended acceleration reviews that often blamed human error.

The agency received 15,174 complaints involving unintended acceleration in the past decade and has run 141 investigations of the phenomenon since 1980, closing 112 of them without corrective action. NHTSA’s repeated conclusion that crashes occurred because drivers mistakenly stomped the accelerator became a policy position that caused investigators to take complaints of runaway vehicles less seriously than they should have, safety advocates say.

Honda will get letters out to owners by the end of April with additional information on the recall. Drivers experiencing the problem can take the vehicles into the dealership and have the lines bled, which will provide a temporary fix until parts are in.

Tags: Auto Recalls, business news, Honda, honda car recalls, Honda Element, honda element recalls, Honda Odyssey, honda odyssey recalls, honda recall, Honda Recall And Brakes, honda vehicles, toyota prius recall, toyota recall

by bintangkecil on Thursday, March 18th, 2010 | Business, News | No Comments

A Walmart store announcer tells black people to leave the store. The company apologized to the upset customers.

A male voice came over the public-address system Sunday evening at a store in Washington Township, in southern New Jersey, and calmly announced: “Attention, Walmart customers: All black people, leave the store now.”

Shoppers in the store at the time said a manager quickly got on the public-address system and apologized for the remark. Many customers expressed their anger to store management.

“I want to know why such statements are being made, because it flies in the face of what we teach our children about tolerance for all,” said Sheila Ellington, who was in the store at the time with a friend.

Officials with Wal-Mart Stores Inc., based in Bentonville, Ark., said that the announcement was “unacceptable” and that they’re trying to determine who made it and how it happened.

“We are just as appalled by this incident as our customers,” the company said in a statement. “Whoever did this is just wrong and acted in an inappropriate manner. Clearly, this is completely unacceptable to us and to our customers.”

This is not the first time the retailer has faced such problems.

There have been several past instances of black customers claiming they were treated unfairly at Walmart stores, and the company faced lawsuits alleging that women were passed over in favor of men for pay raises and promotions.

In February 2009, the retailer paid $17.5 million to settle a class action lawsuit alleging racial discrimination in its hiring of truck drivers.

And the U.S. Equal Employment Opportunity Commission sued the company in May 2009, claiming some Hispanic employees at a Sam’s Club subsidiary in California were subjected to a hostile work environment. That suit alleges managers failed to stop repeated verbal harassment, including the use of derogatory words, against employees of Mexican descent.

However, the National Association for the Advancement of Colored People has said the company has worked hard in recent years to show it cares about diversity.

Bill Mitchell, a former Walmart employee who was shopping Wednesday at the store, said that he was saddened to hear about the announcement but that “as a black man, I’ve heard worse things.”

As customer Sharon Osbourne, of Williamstown, left the store Wednesday, she called the announcement “appalling, stupid and sad.”

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by bintangkecil on Thursday, March 18th, 2010 | Business, News, Tech/Gadget | No Comments

“I will create an Avatar movie portrait from your picture for $5″
“I will be your wake up call for a week for $5″
“I will write your wedding vows for $5″

Those are few things that people willing to do for only $5 on Fiverr website.

A website called fiverr.com is a site that allows you to buy and sell tasks for $5.

The genesis of the site was purely practical, says Micha Kaufman, co-founder and CEO. The entrepreneur says he was irked by having to convert a chart in Microsoft Word into Excel. The task was too small to hire a separate employee or contractor, but large enough to be annoying and relatively time-consuming. Although sites like odesk.com help assemble workers for projects, Mr. Kaufman wanted something smaller in scale.

To keep it simple, Fiverr removed negotiations from the site and decided $5 was the sweet spot for pricing. The micro, micro, micro economy launched less than a month ago and already has 5,000 gigs posted. The site is Israel-based but draws users worldwide.

Some sellers’ offerings seem dramatically undervalued, such as the posts from a doctor who answers medical questions in plain English. The more creative gigs, like songwriting, also have taken Mr. Kaufman by surprise. “It went beyond our imaginations,” he says.

The $5 asking price ensures that there’s an investment by both the buyer and seller, but not a large one. “There is a tendency of others to think that if you give something out for free, it’s worth nothing,” Mr. Kaufman says. He would not elaborate on any future plans to expand to gigs that cost, say, $10 or more, but says there “are surprises” in store.

Although buyers pay $5, sellers receive $4, after payment-processing and Fiverr fees, which is the primary way the site makes money. PayPal is the payment method and posting a gig is free.

The site is a good match for this economy. Buyers are looking for cheap prices and sellers are often unemployed or underemployed, seeking freelance income.

Tags: fiverr, fiverr website, fiverr.com, Micha Kaufman, paypal, the things people do for $5, things people do for $5

by bintangkecil on Wednesday, March 10th, 2010 | Business, News | No Comments

The world has a new richest man: Carlos Slim Helu. Mexican tycoon Carlos Slim Helu has beaten out Americans Bill Gates and Warren Buffett to become the wealthiest person on earth and become the top billionaire on the 2010 Forbes list of the World’s Billionaires.

Slim’s fortune has gained $18.5 billion in 12 months. Shares of America Movil, of which Slim owns a $23 billion stake, were up 35% in a year. That puts him ahead of Microsoft (MSFT) cofounder Bill Gates, who had held the title of world’s richest 14 of the past 15 years.

Here are the top 10 World’s Billionaire according to Forbes:

1. Carlos Slim Helu ($53.5 billion)

Telecom, Mexico.

Telecom tycoon who pounced on privatization of Mexico’s national telephone company in the 1990s becomes world’s richest person for first time after coming in third place last year. Net worth up $18.5 billion in a year. Recently received regulatory approval to merge his fixed-line assets into American Movil, Latin America’s biggest mobile phone company.

2. Bill Gates ($53 billion)

Microsoft, U.S.

Software visionary is now the world’s second-richest man. Net worth still up $13 billion in a year as Microsoft shares rose 50% in 12 months, value of investment vehicle Cascade swelled. More than 60% of fortune held outside Microsoft; investments include Four Seasons hotels, Televisa, Auto Nation. Stepped down from day-to-day duties at Microsoft in 2008 to focus on philanthropy.

3. Warren Buffett ($47 billion)

Investments, U.S.

America’s favorite investor up $10 billion in past 12 months on surging Berkshire Hathaway shares; says U.S. has survived economic “Pearl Harbor,” but warns recovery will be slow. Shrewdly invested $5 billion in Goldman Sachs and $3 billion in General Electric amid 2008 market collapse. Recently acquired railroad giant Burlington Northern Santa Fe for $26 billion.

4. Mukesh Ambani ($29 billion)

Petrochemicals, oil and gas. India.

Global ambitions: His Reliance Industries, already India’s most valuable company, recently bid $2 billion for 65% stake in troubled Canadian oil sands outfit Value Creations. Firm’s $14.5 billion offer to buy bankrupt petrochemicals maker LyondellBasell was rejected. Since September company has sold Treasury shares worth $2 billion to be used for acquisitions. Late father, Dhirubhai, founded Reliance and built it into a massive conglomerate.

5. Lakshmi Mittal ($28.7 billion)

Steel, India.

London’s richest resident oversees ArcelorMittal, world’s largest steel maker. Net profits fell 75% in 2009. Mittal took 12% pay cut but improved outlook pushed stock up one-third in past year. Looking to expand in his native India; wants to build steel mills in Jharkhad and Orissa but has not received government approval. Earned $1.1 billion for selling his interest in a Kazakh refinery in December.

6. Lawrence Ellison ($28 billion)

Oracle, U.S.

Oracle founder’s fortune continues to soar; shares up 70% in past 12 months. Database giant has bought 57 companies in the past five years. Completed $7.4 billion buyout of Sun Microsystems in January; acquired BEA Systems for $8.5 billion in 2008. Studied physics at U. of Chicago; didn’t graduate. Started Oracle 1977; took public a day before Microsoft in 1986.

7. Bernard Arnault ($27.5 billion)

Luxury goods, France.

Bling is back, helping fashion icon grab title of richest European as shares of his luxury goods outfit LVMH–maker of Louis Vuitton, Moet & Chandon–surge 57%. LVMH is developing upscale Shanghai commercial property, L’Avenue Shanghai, with Macau billionaire Stanley Ho.

8. Eike Batista ($27 billion)

Mining, oil. Brazil.

Vowing to become world’s richest man–and he may be on his way. This year’s biggest gainer added $19.5 billion to his personal balance sheet. Son of Brazil’s revered former mining minister who presided over mining giant Companhia Vale do Rio Doce got his start in gold trading and mining.

9. Amancio Ortega ($25 billion)

Fashion retail, Spain.

Style maven lords over Inditex; fashion firm, which operates under several brand names including Zara, Massimo Dutti and Stradivarius, has 4,500 stores in 73 countries including new spots in Mexico and Syria. Set up joint venture with Tata Group subsidiary to enter India in 2010. Betting on Florida real estate: bought Coral Gables office tower that is currently home to Bacardi USA.

10. Karl Albrecht ($23.5 billion)

Supermarkets, Germany.

Owns discount supermarket giant Aldi Sud, one of Germany’s (and Europe’s) dominant grocers. Has 1,000 stores in U.S. across 29 states. Estimated sales: $37 billion. Plans to open New York City store this year. With younger brother, Theo, transformed mother’s corner grocery store into Aldi after World War II. Brothers split ownership in 1961; Karl took the stores in southern Germany, plus the rights to the brand in the U.K., Australia and the U.S. Theo got northern Germany and the rest of Europe.

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by bintangkecil on Monday, March 1st, 2010 | Business, News | No Comments

IBM is continuing to layoff more employees today, according to the union-backed Alliance@IBM. At IBM, layoffs are referred to as ‘resource action‘; employees call it ‘being RA’d‘. IBM employs over 10,000 people at its RTP campus, the largest center of IBM.

Employees at a WebSphere development and support lab in Silicon Valley have reported a “big RA” is expected there with an “estimated 40-50%” of the staff to be “RA’d” on Monday, according to a post on the Alliance@IBM Web site. The Alliance is the union affiliate that is seeking to represent IBM workers.

News of the layoffs comes after IBM released its 2009 earnings of $13.4 billion dollars, with IBM shares trading at $127.16. Last year, IBM announced record profits and then released 5,000 employees the very next day.

It’s been reported that IBM has cut more than 30,000 U.S.-based employees in the last four years.

The company has laid off some employees at IBM East Fishkill, as well as, separately, 24 workers across its Systems and Technology Group. STG is the largest bloc of IBM workers in the mid-Hudson, making up the company’s primary operations in Poughkeepsie and East Fishkill.

The non-STG East Fishkill layofs are in the company’s Global Delivery Framework operation.

An undetermined number of sales employees were also let go, according to Alliance@IBM.

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by wildcherry on Tuesday, February 23rd, 2010 | Business, News | No Comments

Today, Toyota executives is expected to apologized for Toyota cars safety problems as the first day of congressional hearings on the company’s safety problems began Tuesday.

Toyota Recalls Congressional Hearing Live Coverage is aired on CSPAN-3

Tuesday Live Coverage Time:
11:02:53 AM - 2:00:00 PM

Toyota Gas Pedals

Wednesday Live Coverage Time
Airing Time:
11:00:00 AM - 2:00:00 PM

You can also watch the live streaming of the Toyota Congressional hearing on Fox News here.

More than a dozen television cameras were poised for the arrival of James Lentz, president of Toyota’s U.S. operations, and Transportation Secretary Ray LaHood.

Both men are expected to face tough questions from the House Energy and Commerce Committee seeking an explanation for acceleration and braking problems that have led Toyota to recall some 10 million vehicles worldwide. LaHood will be questioned on how his agency investigated the manufacturer’s safety problems and whether the public was protected.

“Ever since I was sworn in as secretary of Transportation 13 months ago, I have said that safety is the department’s No. 1 priority,” LaHood is to tell lawmakers, according to his prepared remarks. “I would like to think that we have demonstrated that commitment time and again.”

But lawmakers were likely to take a tough approach in the highly publicized hearing, the first of two this week and a third in the Senate scheduled for next week. The panel will also hear from motorists who lost control of their vehicles, which suddenly accelerated to 100 mph because of problems with the gas pedal.

Committee investigators have found that the government was slow to respond to 2,600 complaints of sudden unintended acceleration from 2000 to 2010.

Toyota has ordered fixes for the acceleration problem in the recalled vehicles and for its 2010 hybrid Prius, which had a brake problem. Top officials have repeatedly apologized for the difficulties and will continue to do so Tuesday.

“In recent months, we have not lived up to the high standards our customers and the public have come to expect from Toyota,” said Lentz, president and chief operating officer of Toyota Motor Sales U.S.A. Inc., in his prepared testimony. “Put simply, it has taken us too long to come to grips with a rare but serious set of safety issues, despite all of our good-faith efforts.”

Toyota said Monday that federal prosecutors and the Securities and Exchange Commission are investigating the company’s safety problems.

The company has insisted that the acceleration problem was mechanical and had nothing to do with the electronic throttle system. Some critics have cited the electronics.

LaHood, in his prepared testimony, said his agency is investigating whether some interference with electronics had a role.

“Although we are not aware of any incident proven to be caused by such interference, NHTSA [the National Highway Traffic Safety Administration] is doing a thorough review of that subject to ensure safety,” the secretary said. “If NHTSA finds a problem, we will make sure it is resolved.”

On Wednesday, the House Oversight and Government Reform Committee will hear from company president Akio Toyoda.

To watch the Toyota congressional hearing Live Streaming Online video, you can go watch it on ABC site.

Source: La Times

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by wildcherry on Monday, February 22nd, 2010 | Business, News | 1 Comment

The Attorney General of Illinois has sued Cambridge Credit Counseling. It seems the most significant impetus for the lawsuit is Cambridge’s relationship with for-profits Brighton Credit and Brighton Debt. Cambridge paid the for-profits to service the debt, rather than being paid by the for-profits to direct business their way.

Also at issue is the fee structure; Cambridge was charging a one-time startup fee that equaled the client’s regular monthly payment, similar to Ameridebt. Illinois law limits startup fees to $50.
This may turn out to be big news; Cambridge is the heavy hitter in the industry; I’m guessing they have 50 to 100 thousand active clients (they claim 160,000). If other states pile on and start suing them, who knows what could happen.

About Cambridge Credit Counseling Corp:

Cambridge Credit Counseling will help you learn to manage your financial situation and get out of debt quickly. Cambridge Credit Counseling’s nationally certified counselors are dedicated to helping you reach financial freedom, and they have the experience to help you create a personalized budget and course of action that will satisfy your short and long term goals. Don’t let your current debt burden overwhelm you. The steps that you take with us today can help ensure a brighter financial future for you and your family.

Here’s the excerpt of Cambridge Credit Counseling Corp Accredation from their site:

Cambridge Credit Counseling Corp. has gone to great lengths to ensure that everyone who contacts us receives superior service for all of their debt counseling needs, as well as the education necessary to help them reach their financial goals. In 2001, Cambridge completed a year-long process to officially become an ISO 9001 registered organization. Unlike other accreditation services that are recognized only in the United States and Canada, ISO 9000 is recognized and accepted worldwide.

The International Organization for Standardization is an organization made up of members from nearly every country in the world. One of the accreditations that this company offers is “ISO 9001:2008.” The various standards that exist within ISO 9001:2008 were developed so that organizations in all industries, product or service related, could benefit from the implementation of a Quality Management System (QMS).

Registration to the ISO 9000 family of standards is not a simple undertaking. Not only did Cambridge undergo a rigorous registration audit of our entire QMS (by an accredited, independent, third-party auditing agency), we will continue to be audited annually by the same accredited auditing agency. This begins the registration process anew, thereby necessitating the continuous auditing of our QMS.

Our registration to the ISO 9000 quality standard signifies that we have implemented and effectively maintain a Quality Management System focused on customer satisfaction and the continuous improvement of our service.

Our Management’s Commitment

The commitment of Cambridge’s senior management team is crucial to the success of ISO 9000. An agency cannot operate effectively if the decision makers are not involved in quality management. ISO requires that senior managers are involved in all decisions that affect the Quality Management System. To ensure that this is the case, all elements of the QMS are discussed in Management Review meetings. The following are topics typically discussed during such meetings.

• Follow-up actions from previous meetings
• Results of Internal Audits
• Status of Corrective & Preventative Actions
• Project Status
• Process Performance
• Customer Feedback & Customer Satisfaction
• Continuous Improvement
The theory behind the importance of management’s involvement is that if a decision must be made to enhance the quality of our service, or if a Project Plan for improvement is to be reviewed, the people in the position to approve the process should already be involved. This results in timely action.

All of these aspects allow us to ensure that our Quality Policy is maintained.
Our Quality Policy is as follows:

Cambridge Credit Counseling Corp. is an ISO 9000 registered credit counseling agency, dedicated to educating the public on the importance of sound financial management and to providing financially distressed individuals and families with the appropriate education, financial management tools and budgeting skills necessary for them to become more financially responsible.

Code of Practice
In 2005, Cambridge became accredited to the Code of Practice, which consists of rules that strictly govern the actions of debt counseling agencies. Among other rules, the Code of Practice requires that:

• The agency’s counselors are certified by a qualified, independent authority
• Counselors fully evaluate an individual’s situation before recommending a course of action.
• The agency maintains a diverse Board of Directors that reflects the interests of its constituents
• The agency provide education to the community
• The agency maintains a system of fiscal integrity that is audited annually by an independent certified public accountant.
During a surveillence ISO audit, the third-party auditor will verify whether Cambridge is meeting all of the standards of the Code. They will conduct in-depth interviews with counselors and other representatives to make sure they are assisting individuals according to the Code’s standards. They will review Cambridge’s documentation to ensure that our performance claims are legitimate and verifiable.

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by wildcherry on Monday, February 22nd, 2010 | Business, News | No Comments

The new credit card law (card act) made some important changes. Card companies must now tell customers how long it would take to pay off the balance if they only make the minimum monthly payment. Customers can only exceed their credit limit if they agree ahead of time to pay a penalty fee. And unless a cardholder misses payments for more than 60 days, interest-rate increases will affect only new purchases, not existing balances.

A look at how the credit card law affects key aspects of your account.

INTEREST RATES

THEN: Banks could raise the interest rate on an account at any time, including the rate on an existing balances, even if you weren’t late on payments.

NOW: The rate cannot be raised in the first year after an account is opened unless an introductory rate has come to an end. After that, cardholders must be notified 45 days in advance of any rate change.

For existing balances, rates can’t be raised unless the account is at least 60 days past due. If payments are made on time for six consecutive months, the original rate must be restored.

There’s still no cap on rates.

DISCLOSURES

THEN: The fine print on cardholder agreements was often difficult to understand. Rates, fees and penalties for other services such as cash advances, for example, could be hard to find. The impact of the interest rate on paying down a balance was hard to compute.

NOW: Cardholders will see how many months it will take to pay off a balance if only minimum payments are made. Statements will also indicate how much needs to be paid each month to pay off a balance within three years.

SERVICE FEES

THEN: Banks could charge as much as they wanted. They could assess annual fees, activation fees and other fees. This was mostly a problem for subprime cards marketed to those with poor credit scores. One popular card, for example, the Premier Bankcard, charged $256 in first-year fees for a $250 credit line.

NOW: Service fees, such as activation and annual fees, will be capped at 25 percent of the credit limit during the first year of use. After that, there is no cap.

GRACE PERIODS

THEN: Some card companies sent out statements not long before payments were due, and sometimes shifted payment due dates from month to month, meaning that payments would not always have enough time to arrive and get processed before being deemed late. As a result, some cardholders ended up getting charged interest or late fees even when they thought they were sending in payments on time.

NOW: The law requires that due dates remain consistent. Statements must be sent out 21 days before the payment due date, and finance charges and fees cannot be applied before that period is up. In practice, about half of card issuers have extended grace periods to as long as 25 days.

OVER-THE-LIMIT FEES

THEN: Banks set credit limits, then routinely allowed charges to exceed those limits. When that happened, though, the customer was charged an over-the-limit fee as high as $39. These fees were often triggered by interest charges or late-payment fees that pushed a balance over the credit limit. What’s more, multiple over-the-limit fees could get charged in a single billing cycle if the balance was paid down and another charge pushed the balance back over the limit.

NOW: The cardholder must specifically agree to permit transactions that exceed the credit limit. Only then can over-the-limit fees be charged. But the fees can’t be triggered by other fees or interest charges. Only one over-the-limit fee may be imposed during a billing cycle. No over-the-limit fees may be charged unless the cardholder has specifically agreed to permit transactions exceeding their authorized credit limit. These fees can no longer be triggered by other fees or interest charges imposed by the card issuer, and only one such fee may be imposed during a billing cycle.

In practice, several of the largest card companies have dropped these fees. Some banks are using pop-up boxes on their Web sites or other methods to obtain consumer authorization.

UNIVERSAL DEFAULT

THEN: If you made a late payment on one credit card or loan, or even late payments for obligations like utility bills, that could trigger interest rate hikes on other credit card accounts.

NOW: Card companies cannot raise interest rates on existing credit card balances. Interest rates can’t rise during the first year an account is open, unless the original agreement spelled out a promotional rate for a limited time.

Consumers with older accounts must be informed of any interest rate increase on new charges at least 45 days in advance. They must also be given a chance to opt out of the hike by canceling the account and paying down the balance at the old interest rate. If an interest rate is increased, the card company must review the account once every six months to assess whether the rate should be dropped.

STUDENTS

THEN: Students arriving on college campuses often confronted a gantlet of credit card marketers handing out T-shirts, pizza and other gifts in exchange for filling out card applications. Credit cards were frequently handed out without checking the applicant’s income sources. In 2008, 84 percent of undergraduates had at least one credit card. Average balances topped $3,100.

NOW: Credit cards may no longer be issued to anyone under age 21, unless the applicant has a co-signer, or can show independent means to repay the debt. Colleges must disclose any marketing deals they make with credit card companies. Banks are not allowed to hand out gifts on or near campuses or at college-related events. (from Huffington Post)

To make sure that you will spot any changes made by your credit card issuer, here’s a tip on how to read your credit card statement:

Here is the breakdown of the new credit card rules, who the Credit C.A.R.D. Act protects, which companies complied in advance and what protections are now guaranteed to cardholders by law.

Find the best credit cards at BillShrink.com

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by bintangkecil on Thursday, February 11th, 2010 | Business, News | 1 Comment

President Barack Obama says he is “agnostic” about the options to repair the federal deficit — including new taxes on the middle class.

Definitions of agnostic: someone who is doubtful or noncommittal about something

As he creates a fiscal commission by executive order to examine and recommend solutions for getting the federal government’s balance sheet back in order down the road, the president maintains that “all ideas are on the table.”

“The whole point of it is to make sure that all ideas are on the table,” Obama said. “So what I want to do is to be completely agnostic, in terms of solutions.”

Obama committed during his campaign for president to avert tax increases for households making less than $250,000 a year - and he is seeking a repeal of the 2001 and 2003 Bush-era tax cuts on households making more than $250,000 a year in the $3.8 trillion budget for 2011 that he has proposed to Congress.

The commission cannot be restricted in its reach, the president maintains. He promised to establish this commission in his State of the Union address after efforts to create a bipartisan budget commission failed in the Senate.

“What I can’t do is to set the thing up where a whole bunch of things are off the table,” Obama said in the interview. “Some would say we can’t look at entitlements. There are going to be some that say we can’t look at taxes, and pretty soon, you just can’t solve the problem.

“So, what I want to do is to be completely agnostic, in terms of solutions,” the president said. “I want everybody to sit down and work off of a common base of facts. And the fact of the matter is that we have a structural deficit that is in place that was there before the recession. The recession has compounded it. ”

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by wildcherry on Tuesday, February 2nd, 2010 | Business, News, Uncategorized | No Comments

Latest update: 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.

Here’s the complete inital news report from 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.

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

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