Obama's tax bait-and-switch

For a moment, he had me. I really thought that Sen. Obama was advocating that we should eliminate all deductions. I'd be all for that. Nope, instead he's repeating the ephemeral "close the tax gap" line that the Democrats have been harping on for ages. Certainly, we need to eliminate the gap between what people are obligated to pay and what they do pay. The only real way to do that, though, is a complete elimination of all deductions and a tax code so simple that you can't avoid paying for fair share.

What I love the most (that's sarcastic, by the way) is that his tax plan is going to cut revenues to the federal government beyond a couple years. By raising the top 1% bracket, he'll be slowing nation-wide economic growth; by giving further tax breaks to those in the lower brackets, he'll be cutting overall revenues without a significant economic stimulus. That's not to say we shouldn't be cutting those brackets; you just have to realize that cutting taxes in the bottom brackets generally has a net reduction in federal receipts while cutting taxes in the top brackets generally has a net increase in federal receipts.

Most amusing, however, is his decision to use age as a taxing differential. It's interesting that he thinks that we should just stop paying taxes once we hit a certain age.

Obama tax plan: $80 billion in cuts, five-minute filings
CNN

WASHINGTON -- Sen. Barack Obama on Tuesday proposed overhauling the tax code to lower taxes for the poor and middle class, increase them for the rich and make it so most Americans can file their taxes in five minutes.

The tax relief plan he envisions for the middle class alone would mean $80 billion or more in tax cuts, he said.

Obama, an Illinois Democrat who is a front-runner for his party's 2008 presidential nomination, said during a speech at the Tax Policy Center that the present tax code reflects the wrong priorities because it rewards wealth instead of work.

"Instead of having all of us pay our fair share, we've got over $1 trillion worth of loopholes in the corporate tax code," he said. "This isn't the invisible hand of the market at work. It's the successful work of special interests."