The same attitude is apparent in the Obama administration's defense of its plan to limit tax deductions for households earning more than $250,000 a year. Peter Orszag, Obama's budget director, says it's "a question of fairness." How so? "If you're a teacher making $50,000 a year and decide to donate $1,000 to the Red Cross or United Way, you enjoy a tax break of $150," Oszag explains. "If you are Warren Buffet or Bill Gates and you make that same donation, you get a $350 deduction—more than twice the break as the teacher."
But that's because the tax rate for the rich guys is more than twice as high as the tax rate for the teacher. They get a bigger "break" because they pay more in taxes to begin with. The unfairness that the Obama administration perceives is built into a system of progressive taxation that includes deductions.
Thursday, March 05, 2009
Fairness As Defined By Reds