Raise Their Rates, Until They Deduct

Budget Director Orszag explained the reduction in mortgage interest deduction to CNBC: it isn't fair that Bill Gates gets a $3500 tax break on a $10,000 interest bill while someone else gets a $2800 tax break. I think I've heard him make the same argument for the charitable deduction reduction.

But Bill Gates gets the larger break because he's paying a higher tax rate! He's paying $3500 in tax on a marginal $10,000 while someone else pays $2800. A higher rate is fair when he's paying tax, and a lower rate fair when he's deducting from them.

This isn't fairness. It's a clever formulation to justify further tax increases on wealth. It is a transparent violation of principle, a distortion of language to secure a petty increment of additional revenue.