About | RSS

TPM LiveWire

Reuters Pulls 'Backdoor Taxes' Story

Rachel Slajda | February 2, 2010, 12:16PM

Spread the word and support this article. Share it on Digg!

Media, Reuters, White House

Send to a friend!

The news service Reuters withdrew a story last night titled "Backdoor taxes to hit middle class" after the White House reached out and pointed out "errors of fact."

The story, which claimed the White House's deficit reduction plan relies on raising taxes against the middle class by allowing tax cuts to expire, was withdrawn at about 8 p.m. Monday, according to Yahoo timestamps. The original story ran at 4 p.m. The withdrawal promises a replacement story later this week.

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

She would not elaborate on the specific errors, but said Reuters will "address those specific points that were incorrect."

"The White House did contact us and point out errors of fact," she added.

The White House did not immediately respond to requests for comment. (Update: An administration official outlines the White House's specific complaints.)

The story was running at the top of the Drudge Report's front page this morning (here's the archived page) until White House Deputy Press Secretary Bill Burton tweeted about the withdrawal:

FYI - Reuters has withdrawn the story at the top of the Drudge Report. Check it out here: http://bit.ly/cykiPJ

Minutes later, Drudge added a link to the withdrawal.

The story, written by Terri Cullen, claims that allowing the Bush tax cuts to expire will hurt 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.

Cullen was hired as Reuters' wealth management editor this month. She had worked for the Wall Street Journal Online for 13 years, helping to launch it and then working as an editor and author of the "Fiscally Fit" column.

Her story also says middle-class families may have already been hurt.

"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," Cullen wrote.

"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)," the story continues.

Michael Linden, the associate director for tax and budget policy at the Center for American Progress, agrees with the White House that the story was misleading.

"The president's budget keeps almost all of these [tax cuts], and no one under $250,000 is going to be facing a tax increase," Linden said, "and to present any other picture is just misleading and wrong."

Late update: Reuters will not run a replacement 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.