IGNORE THE MAN BEHIND THE CURTAIN

Ed Morrisey thinks President Obama may have inadvertently endorsed the flat tax last night.

I don’t. I think it’s much worse. Here’s Obama on reducing the charitable contribution deduction for “the rich.”

People are still going to be able to make charitable contributions. It just means, if you give $100 and you’re in this tax bracket, at a certain point, instead of being able to write off 36 percent or 39 percent, you’re writing off 28 percent.

Now, if it’s really a charitable contribution, I’m assuming that that shouldn’t be the determining factor as to whether you’re giving that $100 to the homeless shelter down the street. And so this provision would affect about 1 percent of the American people. They would still get deductions. It’s just that they wouldn’t be able to write off 39 percent.

In that sense, what it would do is it would equalize — when I give $100, I’d get the same amount of deduction as when some — a bus driver who’s making $50,000 a year, or $40,000 a year, gives that same $100. Right now, he gets 28 percent — he gets to write off 28 percent. I get to write off 39 percent. I don’t think that’s fair.

His explanation is slick, glib – and wrong. Absolutely, flatly wrong.

Here’s what actually happens. If Joe Sixpack decides to give that marginal dollar to charity, what happens is this: Joe gives 72 cents and directs Uncle Sam (through the charitable deduction) to give 28 cents to the charity Joe specifies. The same is true for Jane Upscale: she gives 61 cents of her marginal dollar to charity and directs Uncle Sam to give 39 cents.

Now under Obama’s proposal, Joe Sixpack’s charitable contribution remains the same. But now Jane Upscale gives 61 cents, directs Uncle Sam to give 28 cents, and pays Uncle Sam 11 cents for his trouble!

David Copperfield would be proud.