Opinion: This Is Not a Tax Cut

(Sept. 15) -- If all you did is read the headlines or half-listen to President Barack Obama talk, you'd no doubt think there was a big income tax cut in the works.

Just check out headlines in the papers or online over the past few days:

Washington Post blogger Greg Sargent noted that Democrats are toying with using the term "The Obama tax cuts for the middle class."

And at his press conference last week, Obama repeatedly referred to "tax relief." As in:

"I have said that middle-class families need tax relief right now. And I'm prepared to work on a bill and sign a bill this month that would ensure that middle-class families get tax relief. ... we can give those families -- 97 percent permanent tax relief. And by the way, for those who make more than $250,000, they'd still get tax relief on the first $250,000 ... Republicans [are] holding middle-class tax relief hostage because they're insisting we've got to give tax relief to millionaires and billionaires."

So, for anyone who might be a little confused by all this, here's a news flash: No one is getting a tax cut. There will be no tax relief for anyone. Zip. Zero. Nada.

Here's what's really going on: To get its tax cuts passed in 2001 and 2003, the Bush administration set them up to expire by law at the end of this year. So, without action by Congress, taxes will go up for everyone, back to the rates that existed during the Clinton administration. The lowest tax bracket would climb to 15 percent from today's10 percent. The highest bracket would climb to 39.6 percent from 35 percent, and all the brackets in the middle would go up, too. Tax rates on capital gains and dividends would also climb.

Obama and most Democrats want to extend all the Bush tax cuts for the middle class, but let tax rates go back up to pre-Bush levels for upper-income families. Republicans and a few Democrats want all the Bush tax cuts to be extended, at least until the economy gets back on its feet.

But no one will be paying a dime less in income taxes next year as a result of anything Washington does about this. The only thing lawmakers are trying to figure out is who should pay more in taxes.

Only in Washington does not hiking someone's taxes constitute a "tax cut."

Sure, it's just politically motivated rhetorical games. But imagine if others outside Washington caught on.