Tuesday, March 19, 2013

Tax Policy Center Says Republican Budget Plan Would Have $5.7 Trillion in Tax Cuts, Most Going to the Wealthy

Gee, Tell Us Something We Did Not Know

A part of the Paul Ryan/Republican budget plan is to cut tax rates for the wealthy folks from about 40% to 25%.  Here’s what a non-partisan tax think tank has to say about it.

The tax plan embedded in the House Republican budget would cut taxes by $5.7 trillion over the next decade, with the benefits flowing disproportionately to very wealthy households, according to a new analysis by the nonpartisan Tax Policy Center.

Taxpayers earning more than $1 million a year would benefit the most from the GOP tax plan, the analysis shows, reaping an average $400,000 tax break that would send their after-tax income soaring by nearly 20 percent. . . .

Aides to Ryan and Ways and Means Chairman Dave Camp (R-Mich.) did not immediately respond to the analysis. 

No No No Republicans would say.  They plan to ‘reform’ the tax system so that revenues would be the same.  How do they plan to do this, we don’t know.  They won’t say.

The budget, drafted by House Budget Committee chairman Paul Ryan (R-Wis.), proposes to make up the revenue lost to those changes through an overhaul of the tax code that would eliminate existing tax breaks and deductions.

But the budget leaves those details to the House Ways and Means Committee, 

But that is what in the Dictionary of Realism is called “pie in the sky”.

Urban Institute resident fellow Howard Gleckman questions whether it is possible to replace all that cash.

“Could Ways & Means find $5.7 trillion in tax preferences? It is hard to imagine,” Gleckman writes, noting that such a large sum would require a 30 percent reduction in existing tax breaks.

“Because the rate cuts are so regressive,” Gleckman continues, “House Republicans would have to heavily skew offsetting tax increases to high-income households if they want to keep the distribution of taxes roughly what it is today. And that will be another heavy lift.”

The good news in all this, the fiscal alchemy that is Paul Ryan is finally beginning to be exposed.  And once it is maybe there can be a serious debate on taxes and tax reform, something the rest of us want but also something Republicans will want to avoid at all costs.

1 comment:

  1. I would agree, except that Ryan's alchemy was already exposed in the presidential election. In fact, the nonsensical notion of cutting rates without sacrificing revenue probably got more attention in 2012 than it will until 2016. Yet here's Ryan peddling the same idea again.