Budget numbers

I've been wondering for a while what Obama meant when he said he was going to raise taxes on families making over $250,000, mostly because that's not a tax-bracket cut off. According to the New York Times summary, His proposal includes undoing the Bush tax cut at the top, apparently creating a new bracket at $250,000 and raising the marginal rate to 36% from 33% for incomes under $370,000, and raising it to 39.6% from 35% for incomes above that.

More interesting to me, though, is his plan to limit the value of tax deductions. I teach my students about the basic structure of the tax plan, and they're always surprised to see the implications. Right now, every $100 that I donate to charity (or spend as interest onmy mortgage) costs me $67, because I get $33 back in taxes. Someone poorer would only get $25 back in taxes; someone richer would get $35 back.

Under the Obama proposal, tax deductions would be capped at 28% (I think this is true even for people currently in the 33% bracket, but under the $250,000 limit). I think that proposal is politically brilliant. "Why should the rich get more help paying their mortgage than the middle class?"

And just in case you thought that budget projections were even remotely credible, the New York Times has a graphic for you:
Obama's projections are, unsurprisingly, on the rosy side, predicting GDP growth in the coming years that's higher than what many economists expect.