A brief analysis of Comrade Obama's tax proposals

I have had the opportunity to digest the tax proposals in Obama's FY '10 budget proposal, and color me unimpressed.   Notwithstanding the utter absurdity of their assumptions - that GDP growth will hit 5% in 2010 and that tax revenues are static (e.g.  - an X% increase in tax will result in an X% increase in revenue), this is a job killer of a tax bill.

Business tax increases include:

1. $210 billion on increased enforcement over 10 years.  This is typical of every president, problem is - over aggressive audits result in a lot of court cases, and the problem is that in order to get this money, it will cost a lot in increased manpower.  Chances of meeting target -50%.
2. Repeal of LIFO.  This was a bigger issue when manufacturing was a bigger portion of GDP and companies were not just-in-time in terms of inventories.   On one level, this is a gimmick.  However, since his reckless deficit spending is highly inflationary - they might make their mark of $61 billion over ten years.  Chances of making target - 70%
3. Taxation of carried interest as ordinary income.   This will be a tough one - despite the talk, the law and the courts will probably make this difficult.  That, and the fact that most hedge funds and private equity funds will be significantly smaller due to the credit bubble bursting, makes it highly unlikely they will get $23.9 billion over 10 years.   Chances of making target - 20%.
4. Cap and trade - let's call it what it is -  a massive and unprecedented tax grab and intrusion of government on a hitherto unimagined scale.  They expect to raise $645. 7 billion in revenues.   This will kill the economy, kill jobs, hit the poor hardest (even with his dubious "make work pay" credits).   Won't even come close as many industries will just close shop (e.g. autos, chemicals, energy intensive industries) and move offshore.     I could pictures oil refineries closing shop and opening up in Mexico.  Chances of making revenue target - 5%.

On the individual side, he is sticking it to the gainfully employed by:

1. Raising the top bracket to 39.6%, raising $338 billion over ten years.  Won't happen.  First, not enough rich people to soak (i.e. will have to raise rates to income levels of $60K), and outside of those in high cost of living jurisdictions (e.g.  New York City - were $250K is barely middle class), a lot of people will take their comp in other ways or will work less.   Even more odious - small business owners who own partnerships or S-Corporation will cut jobs or other investments as their taxes go up.  This will be another job killer.  Chance of making revenue target - 15%.
2. Phasing out mortgage interest and charitable deductions - aka "the only Churches and School we'll have are run by the state phase out".   Won't raise much revenue ($179 billion over 10 years) as mortgage as AMT deals with some of this, plus, not enough rich people.   Chance of making revenue target - 20%
3. Increasing capital gains and dividend tax rates to 20%.   Based on this market, companies are cutting back on dividends to preserve capital and are tanking thanks in no part to Obama.    Market still has a long way to go and other proposals will tank the economy  and the stock market more.  This is another example of static budgeting not taking into consideration economic reality, so $118 billion is unrealistic.  Maybe they got the guys who figured that packaging a bunch of subprime mortgages would result in a AAA credit rating.  Chances of making revenue target - 10%

We are looking at the 70% all over - debased currency, stagflation, and malaise .   Gold is looking awfully good as a store of value.