Jacob Sullum

In his speech to Congress last week, President Obama promised to "go line by line through the federal budget in order to eliminate wasteful and ineffective programs." Although the process was not completed yet, he said, "we have already identified $2 trillion in savings over the next decade."

But it turns out that tax increases account for half of those "savings." From Obama's perspective, it seems, letting people keep their own money qualifies as a "wasteful and ineffective program." That makes sense if you believe all resources are the government's to distribute as it sees fit, which is the premise underlying the multitrillion-dollar spending binge that Obama calls "A New Era of Responsibility."

Under the Bush administration, Obama said, "a surplus became an excuse to transfer wealth to the wealthy." Whatever you think about the wisdom of Bush's tax cuts, they amounted to taking less from people, not giving more to them. Obama makes it sound as if there is no meaningful difference between robbing Peter to pay Paul (which is what he has in mind when he talks about "rebalancing the tax code") and leaving Peter alone (or, more accurately, robbing him less thoroughly) -- except that the latter option is, in Obama's view, morally inferior.

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," Orszag 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.


Jacob Sullum

Jacob Sullum is a senior editor at Reason magazine and a contributing columnist on Townhall.com.
 
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