Libthink tax policy: Obama wants it both ways

Not only is Obama going to raise the top bracket (indeed, as he increases EVERYBODYS taxes in stealth mode), he's going to limit charitable deductions by those in the top bracket to only 28% of the contribution.

Noteworthy:

"By simultaneously increasing tax rates to 39.6 percent and decreasing the tax benefits of deductions to 28 percent, the government can (a) eliminate the increased tax incentive for giving and thus protect its new revenue; and (b) at the same time, reduce the tax benefit for the giving already occurring and thus generate even more money for the government. The government keeps its higher revenues that might be reduced by increased contributions, while the charities see existing contributions fall (since the tax cost to contributors of even the existing level of contributions increases). There is an effective shift of money from private charity to government -- the exact opposite of what would occur if there were only a single whammy (an increase in tax rates).

So the Obama plan hurts not only top-bracket taxpayers, but the charities themselves. The administration has an answer to this, but as Jacob Sullum notes in "Obama's Charitable Taking," the response reveals the underlying philosophy behind the two-whammy proposal:

In response to nonprofit organizations worried that limiting the deduction for charitable contributions will reduce donations, The Washington Times reports, [Budget Director Peter] Orszag "said Mr. Obama took care of that by giving charities government money to make up part of the difference." Orszag noted that "in the recovery act, there's $100 million to support nonprofits and charities." In essence, then, Obama plans to take money people otherwise would have given to the charities of their choice and give it to the charities of his choice."

It's Libthink class warfare at its ugliest.

What a guy!