E.J. Dionne, a liberal's liberal and often a leading indicator of the liberal line, twists himself into a pretzel defending President Obama's plan to tax charitable deductions. Here is his indictment of the unfairness of it all under the current tax structure (update* - logic taken from President Obama's p;ress conference:
Obama's proposal is based on a sound intuition: Do we really believe it's fair that when a married couple with a taxable income of $50,000 gives $1,000 to charity, they get a tax benefit of $150, while a couple earning $1 million making exactly the same contribution gets back $350? Is it fair that the higher-income couple also gets a bigger tax advantage on their mortgage payments?
The value of the deductions is currently worth more to the higher-income couple because they pay taxes at a higher rate. Obama wouldn't even close the whole gap. Applied to this example, his 28 percent cap would still let the wealthier couple deduct $280.
Note that if Obama merely raised income tax rates on the highly-taxed rich couple, it would get more unfair -- to the low-taxed couple. Hence the need to add even more taxes on the rich couple. reducing their deduction.
One cynical definition of an intellectual is a person willing to believe something preposterous and congratulate himself on his sophistication.
Update: I missed Obama's mentioning of this logic. To be honest, I couldn't watch the whole thing for boredom, so took some breaks.
Thursday, March 26, 2009
According to liberals: