Senator Obama’s promise to restore fairness to our tax code is one of several recurring themes intended to give force and focus to his message of change. On the campaign trail, as well as his web site, he continually reminds audiences that our tax laws contain loopholes that mainly “remove the burden from the well off . . . [i]nstead of having all of us pay our fair share.” The tax code, he says, “tilts the scales toward the well-off . . . because they’ve got lobbyists in Washington sticking up for their interests” and “nobody lobbies for working people.” 

            He promises that once he’s President, this will change: there will finally be someone powerful in Washington to make sure the peoples’ voice is heard.

            That so many Americans are so passionately convinced the Senator’s “Plan to Restore Tax Fairness to America” is some vital best chance for them, is a classic illustration of how the politics of public despair is such great politics in the hands of a skilled campaigner. Although the apparently soul-stirring appeal of Senator Obama’s gospel of change has been attributed to its upbeat message, at least in regard to his tax message just the opposite is the case. His characterization of the code is actually a distortion of the truth calculated to make everyday Americans bitter about being shafted by Washington and the rich – in fact, so spitefully bitter they would vote for a man to be President of the United States almost solely on the basis of his rhetoric rather than his resume.

       For the real truth is that although the rich clearly have influential friends in Washington and a small few exploit incredibly exotic loopholes, as a regular matter our tax laws carve out far more loopholes for low and middle income taxpayers than for rich taxpayers.

            Consider these highlights from the 2006 income tax returns of two families I’ll call the Eliots and the Upchurches.

            Skip Eliot is a nurse who earns $50,000 a year. Theo Upchurch owns a construction company and at $345,000 a year is among the top income earners in the country. Both families carry mortgages on homes in the same city in Ohio. Each has a ten-year-old living at home plus two older children in college. Both wives are homemakers.

            Each family, of course, is allowed to subtract personal exemption amounts from its income before figuring out what it owes in taxes.  However, while the five people in Skip’s family were each entitled to the full $3200 personal exemption, the income tax laws only recognized each person in Theo’s family as three-fifths of a person. Because of Theo’s high income, each member of his family was limited to a $1920 personal exemption - $9600 for the entire family compared to a total $16,000 exemption deduction for the Eliot family.

                              >     Furthermore, the Eliots claimed a dollar-for-dollar credit of $2400 against their taxes to off-set the college expenses of their two older children. The two Upchurch children at the very same two colleges?  Not entitled to any credit at all.

>      The Eliots got a $1000 credit to off-set their youngest child’s upkeep and care, the Upchurches, nothing.

>    The Eliot family was entitled to a full 100% deduction for what they paid in (1) state income taxes; (2) local incomes taxes; (3) real estate taxes; (4) charitable contributions; and (5) the interest on their home mortgage. In each of these five cases the Upchurches were allowed to deduct only 93% of these costs from their family income.   

            > The unequal tax treatment goes on and on: Mr. Eliot could deduct 100% of his mortgage insurance, Mr. Upchurch not a penny; Mr. Eliot paid only 1.45% of his income in Medicare tax, Mr. Upchurch 2.4%; Mrs. Eliot was allowed to invest in tax-advantaged IRA’s, Mrs. Upchurch was not.

            Of course, all of this is without regard to the fact that Mr. Upchurch’s percentage tax rate against his income, under our progressive system, was far higher than Mr. Eliot’s.

            This is not a criticism of tax breaks for those in lower brackets. The point is that campaign rhetoric that high-income Americans cheat the system by exploiting tax loopholes unavailable to ordinary Americans would have us believing the worst about how our representative government actually functions. The fact is, Congress has been extremely responsive to the needs of those Americans who can least afford a reduction in their income by the burden of high income taxes.

            There’s enough divisiveness in this country today without Americans of limited means resenting how the tax laws are stacked against them when it simply is not true. It’s important for public confidence in our system as an effective democracy that Americans understand, contrary to what they so often hear from politicians whose election depends on knocking the status quo, that their elected representatives do not take all their direction from the rich and powerful but are actually realistic and compassionate about how difficult it is for families like the Eliots to make ends meet.   Senator Obama’s web site claims his campaign is “powered by hope.” The real message of hope and unity is that America is not as bad or unfair as some candidates for office would have us believe.