Given the current debt ceiling debate I thought it timely to bring this post forward. You should know that “reducing tax expenditures” is DC Speak for raising taxes. This post was originally published in April 2011.

From the New York Times

Mr. Obama described what he called a “debt fail-safe”: “If, by 2014, our debt is not projected to fall as a share of the economy — if we haven’t hit our targets, if Congress has failed to act — then my plan will require us to come together and make up the additional savings with more spending cuts and more spending reductions in the tax code.”

“Spending reductions in the tax code” to bring down the deficit sounds appealing… unless you understand it. Exactly what are “spending reductions in the tax code”? The Browns explain it in their post at Townhall.com.

If you assume that all money belongs to the government [ ] then all money doled out to the pockets of Americans must be expenditures.

It works like this. You buy a home and pay lots of interest to the bank in the form of a mortgage. When at the end of the year we add up your income, you are allowed to deduct the interest you paid to the bank from that income. This lowers your overall income tax bill.

Republicans believe that the lower tax bill is your total tax bill. Obama believes that your tax bill was actually higher, and the government was giving you money to help pay the mortgage. Hence, when he takes away your mortgage deduction, he is actually cutting a government “tax expenditure.”

In the mindset  of Barack Obama the portion of your income that you’re allowed to keep is a government expense. Any change in the tax code that increases the amount you can keep (reduces your taxes) is a government expense. By this convoluted reasoning, taking away a traditional deduction is a reduction in “tax expenditures”.

Read that clip from the New York Times again. You will see that Obama’s “debt fail-safe” plan calls for automatic tax increases if the government overspends. Calling a tax increase a “reduction in expenditures” is not only the ultimate propagandic, it is intensely dishonest. And Obama and the Democrats are not the only ones that do it.

UPDATED 7/17/2011

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