Obama’s tax reform

Not even three months into his presidency, Barack Obama already has developed a nasty habit of making grandiose promises and proposals, doing precisely the opposite of what he says and celebrating his hypocrisy and insincerity as a policy triumph.

Keep lobbyists out his administration? That lasted a couple of days. Lead a new era of fiscal responsibility? His agenda will run up budget deficits that George W. Bush couldn't have dreamed of. No tax increases of any kind for households earning less than $250,000 per year? He signed off on a huge cigarette tax hike that will pummel the poor. His populist criticism of rich, corporate fat cats and cheers for working families? He's bailing out every board room on Wall Street on the backs of taxpayers not yet born.

And on and on and on.

So what are we to make of President Obama's tax-day declaration that he will pursue "a simpler tax code that rewards work and the pursuit of the American dream"? Are we supposed to laugh? Or just concede that the president's latest idea of change will amount to the status quo on steroids?

"For too long, we've seen taxes used as a wedge to scare people into supporting policies that increased the burden on working people instead of helping them live their dreams," President Obama said. "That has to change, and that's the work that we've begun."

What Mr. Obama is saying here has nothing to do with tax simplification and everything to do with his "social justice" agenda -- his overriding belief that the federal government must ramp up the redistribution of wealth in the name of "fairness."

Read the first sentence of the president's quote again. He's referring to the country's current income and capital gains tax structure, signed into law by President Bush at the start of this decade. Mr. Obama believes that allowing the affluent and the upper-middle class to keep more of their own money is a "wedge issue."

He is saying that even though the bottom 90 percent of earners pay only 28 percent of all income taxes -- the bottom 40 percent pay no income taxes at all -- they have been frightened into wrongly believing that more punitive tax rates on the top 10 percent will damage the economy. Mr. Obama believes that having the top 10 percent of taxpayers pay 72 percent of the nation's income taxes has "increased the burden" on the other 90 percent -- when that same 90 percent paid 32 percent of all income taxes in 2001, before George W. Bush's tax cuts became law.

The top 10 percent of taxpayers have seen an increase in their burden this decade, not the bottom 90 percent.

President Obama's efforts -- "the work we've begun" -- involve having significantly more filers pay no income taxes whatsoever. His proposed "Make Work Pay" tax cut would increase the percentage of households that do not pay income taxes from 40 percent to 50 percent. This, according to President Obama, is fair.

"It will take time to undo the damage of years of carve-outs and loopholes," Mr. Obama said. "But I want every American to know that we will rewrite the tax code so that it puts your interests over any special interest."

Who is the president trying to kid? He's not talking about reducing the Internal Revenue Code down to a pamphlet that can be explained in a few minutes. He wants to retain the same Byzantine abomination that has been used by Congress for generations as a tool for social engineering.

His ambitious, expensive social agenda demands revisions to the tax code, but not reductions. He wants to get rid of perceived "carve-outs and loopholes" that have prevented the financially stable and the wealthy from paying as much in taxes as he thinks they can afford to pay. He wants some industries, especially the oil business, to essentially hand over their bank accounts.

President Obama will preserve the multitude of tax credits and deductions that allow the lower and middle classes to keep virtually all of their income. The only genuine simplification Mr. Obama has in mind is the elimination of many standard deductions -- for the rich, of course.

It is not in the national interest to have the few pay the bills of the many. It erodes the incentive to work and increases pressure on the country's most productive taxpayers to support an increasing number of tax consumers. Everyone must have a fiscal stake in their government.

This is another phony pitch from the president.