Help me understand the logic of Obama’s proposed budget. He wants to increase federal government spending next year to “$3.94 trillion, up 32 percent from a year ago.” And to help pay for this 32% increase in federal spending, especially increases in social welfare, Obama proposes to reduce the deductability for donations to charity for the top income brackets to 28% of the donation. Effectively, Obama wants to pay for more government welfare by increasing the taxation of the private provision of those services.
And Obama’s proposed budget would also cap the deductability of mortgage interest for the top income brackets at 28%. That tax increase would help pay for a huge expansion in government expenditures to prop up the housing market.
The only thing that could account for these proposals is a belief in the inherent superiority of government-provided services over the provision of those same services in the private sector. We would have to believe that the government is better at identifying and serving charitable needs than are private charities. We would have to believe that government can better identify under-priced housing than private buyers can.
Mind you, I wouldn’t mind getting rid of charitable and mortgage deductions in exchange for lower marginal rates since I think these targeted deductions distort behavior. But Obama is proposing to raise marginal rates while reducing these deductions. Welcome to the welfare state.
Jay P. Greene's Blog 
What are the indications that “logic” was involved?
Oh, I don’t know – I would say the fact that the proposal simultaneously expands the welfare state and raises taxes on private charity shows that there’s a definite logic to it. The people who crafted it clearly know what they want to happen and have coordinated their policy accordingly.
Good point–and I should have seen it–I had already figured out that the motivation was probably to cripple non-government efforts so it would be clear that “government needs to take over”.