Obama jumps on the IRS prepares your taxes bandwagon

From the AP:

Obama's plan was short on some specifics. But he said he would give 150 million workers a $500 payroll tax credit, expand relief on mortgage interest, eliminate income taxes for seniors making less than $50,000 and simplify returns so millions can file in less than five minutes.
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Obama said more people who own their homes should get relief from mortgage payments. The current mortgage interest deduction only goes to those who itemize their taxes, while Obama would create a universal mortgage credit of 10 percent of interest payments that the campaign says would benefit an additional 10 million homeowners.
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The campaign said Obama's plan to eliminate taxes on seniors making less than $50,000 annually would mean 22 million elderly would no longer need to file an income tax return or hire a tax preparer.
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Additionally, the IRS would send prefilled tax forms to 40 million workers who take the standard deduction and have a bank account. They would simply have to sign and return it, which Obama estimates would save more than $2 billion in tax preparer fees, 200 million hours of work and "an incalculable amount of headache and heartburn."

Overall, tax simplification is a great issue for Democrats.  Neil the Ethical Werewolf over at Ezra Klein's blog discussed the politics of taxes a while back.  John Edwards has already proposed a prefilled tax form plan that could affect up to 50 million Americans.  I haven't heard anything on this from Hillary Clinton, but maybe she'll propose it too or already has.

The mortgage proposal sounds reasonable to me, although I'd really like any changes to include a cap on how much is deductible.  Uncapped mortgage deductions are one of the things making it unprofitable to build low-income housing.  That said, anyone that would be affected by such a cap already itemizes, so this would probably help matters some.

I'm iffier on the proposed no taxes for seniors making less than $50,000.  I'm happy to support retirement benefits, but we shouldn't discourage seniors from staying in the job market.

Via Sullivan who describes it as a pander.  I think that's unnecessarily harsh.  While the government will have to pay a bit more to provide this service, it also means they don't have to inspect some 40 million returns closely.  I also think the government is in a better position to run the numbers, so between the government and taxpayers, less money will be spent on tax prep overall.  Finally, many company take steps to make billing less onerous.  So it's not like achieving this kind of efficiency is not a solution regularly taken by free-markets.  So, in short it's a proposal that is likely to be both popular and cost effective.