In a little remarked upon move earlier this month, Sen. Max Baucus (D-Mont.) put forward a legislative proposal to raise taxes on energy companies by stripping them of the ability to claim a key tax deduction.

Known as Section 199 relief, the deduction in question has been available to companies engaged in energy production, as well as manufacturing, for several years as an incentive to encourage operations and employment.

However, under an amendment introduced by Baucus, which could be voted on in the Senate next month, that deduction would be eliminated for certain players in the energy industry.

According to a memo obtained by Capitol Confidential and written by Senate Finance Committee staffers Scott Mulhauser and Erin Shields, the Baucus amendment is intended as a substitute to another introduced by Sen. Mike Johanns (R-Neb.).  The Johanns amendment is itself intended to modify the Small Business Jobs Act.

The memo states that “the Democratic alternative… would repeal Section 199 of the tax code, which currently allows these corporations to deduct six percent of their income from oil and gas production from their tax liability, effective December 31, 2010.”

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Recently, retired military have received e-mail messages notifying them of a withholding tax increase. The email states:

NO ANNUAL COST OF LIVING ADJUSTMENT (COLA) WILL BE ADDED TO MILITARY RETIRED PAY IN 2010.

DUE TO RECENT LEGISLATION YOUR FEDERAL WITHHOLDING TAX HAS CHANGED.

After much investigating and several discussions with the IRS, it appears the Democrats have played a “cash-flow trick” on working Americans and are taking more out of American’s paychecks across the board–all the while touting the Making Work Pay tax credit.

The trick, when looking at the new withholding tax tables for 2010 as compared to post-stimulus 2009, buries an increase in federal withholding taxes–for all income categories–basically giving the government an interest-free loan until current year taxes are filed next year. Some would blame the increase in withholding on the Making Work Pay tax credit being spread out over 12 months as compared to 2009, which was only over 9 months, but this would be impossible as some middle class wage categories carry an increase in the withholding tax of over $200 per pay period.

Unlike the middle class wage earners, who are going to see huge amounts taken out of their paychecks, unless they increase their exemptions on their W4 form, it’s an increase that most wouldn’t even notice–$10 or $20 in some cases. Here are some of the “highlights” of the new 2010 withholding tables:

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