President Obama’s promise of transparency in government is a laudable goal after too many years of near-obsessive secrecy by the Executive Branch. Unfortunately, at least when it comes to his tax agenda, the president’s new budget falls far short of that vow. Too many tax proposals are written in Inside-the-Beltway code. For many provisions, there is no description at all in the 134-page budget. Most can be found only by deciphering the tables in the back. Some items worth hundreds of billions of dollars appear only as mere footnotes. Others are nothing more than numbers in revenue tables. There are no real proposals at all.

There are already signs that a key tax element of President Obama’s budget--his proposal to limit to 28 percent the value of all tax deductions—may not survive on Capitol Hill. And if it is allowed to die, Congress may find itself staring squarely at another hard-to swallow tax hike—trimming the tax exclusion for employer-sponsored insurance. Key Republicans have strongly objected to the curb on deductions. Powerful Democrats, including Finance Committee chairman Max Baucus (D-Mt), are less than enthusiastic. Charities that fear they will lose contributions are gearing up for a big fight, even though TPC estimates that gifts would decline by only about 2 percent. And in the face of this criticism the Administration has signaled that it may not fight very hard to save the proposal. "We recognize there are other ways to do this," Treasury Secretary Tim Geithner told the Finance panel yesterday.

Critics charge that President Obama’s plan to limit the value of itemized deductions to 28 percent would hurt charities at the time they most need financial support. Their argument: Since the maximum value of the deduction for donations to charity would fall from 39.6 percent to just 28 percent , the affluent will give less. Republican Whip, Eric Cantor, asked, “Is there any better time to have charities in full throttle than when you have tough economic times?” How much would the proposal affect donations? A back-of-the envelope estimate suggests that the Obama plan would reduce annual giving by about two percent, or roughly $9 billion. Here’s how we got there.

Tax-exempt bonds have always been something of a two-edged sword. On one hand, they reduce borrowing costs for state and local governments. On the other, they suffer from both built-in inefficiencies and the potential for serious abuse. The newly enacted stimulus bill didn’t do much to prevent the abuses—indeed it includes eight separate provisions that would expand the use of bonds for a wide-range of purposes from housing to alternative energy. But it did add one provision that promises to make municipal bonds a far more efficient way for states and localities to raise money.

To help pay for health reform, President Obama’s wants to limit deductions for high income taxpayers. He’s on to something, but I’ve got some questions about what he’s doing. This tax increase, sure to be politically contentious, would kick in starting in 2011 and raise about $318 billion over 10 years. That sounds like a lot, but in fact it would only fund about 20 percent of the total cost of the health plan Obama outlined in his presidential campaign. TPC estimated the price of that plan at $1.6 trillion over 10 years.

Most American think that the tax rate on capital gains for most taxpayers is 15 percent. But that is far from the whole story. For example, gains from the sale of collectibles, such as art or wine, are taxed at higher rates—though, for taxpayers subject to marginal rates of 28 percent or above, still less than wages or interest are taxed. Then there are the gains on the sale of stock in a qualifying “small” business (with assets under $50 million). These profits are taxed at 14 percent—only a bit lower than the normal 15 percent rate. And even that advantage all but disappears for those small business owners hit by the Alternative Minimum Tax. For them, the effective capital gains rate is 14.98 percent.

Budget watchers Alan Auerbach and Bill Gale have just finished a new paper on the nation’s long-term fiscal future. I’ll get to the numbers in a second, but their conclusion could hardly be more grim: “The federal fiscal outlook is both bleak and uncertain.” And if that doesn’t get your attention, try this: Auerbach and Gale note a “discernable uptick” late last year in market fears of default in 5-Year Treasury notes. Have a nice day.