Obama’s Tax Cuts and Fiscal Neutrality

Obama ‘08 calls his new proposal “tax fairness”. It does have a few tax cuts for the average Joe, but Kevin Drum is not exactly impressed:

I know that it’s unfair to expect Obama to live up to his own hype every day. Not every proposal from his campaign is really going to be bold and innovative, even if he says it is. But really, if he’s planning to campaign as the guy with fresh ideas, he’s going to have to do better than this.

I see the Republicans topping the modest tax cuts that Senator Obama is proposing by promsing larger tax cuts for everyone. But that’s the problem. The GOP is all about Spend&Spend and Borrow&Borrow, which simply means deferring the tax bite. I don’t want Democrats promising voters that money grows on trees. So I read down to see where Senator Obama might try to actually increase tax revenues and found this:

Obama would pay for his tax reform plan by closing corporate loopholes, cracking down on international tax havens, closing the carried interest loophole, and increasing the dividends and capital gains rate for the top bracket.

I hope he means it and he finds a way that we can better enforce the current tax laws – including enforcement of section 482. The current Administration doesn’t seem so interested in insuring that U.S. based multinationals don’t shift income to the tax havens. So good for the Senator for proposing the obvious. But let’s not get too carried away as to how easy this will be or how much in revenues this will raise.