Posted by AzBlueMeanie:
The GOP's alleged boy genius, Ayn Rand fanboy Rep. Paul Ryan (R-WI), dubbed the "Flimflam Man" by Paul Krugman, is engaging in budget fraud. Ezra Klein today exposes the fraud in Ryan’s tax reforms cost more than all his spending cuts combined:
Here’s an amazing fact: Ryan’s tax reform plan costs more than all his spending cuts combined.
So how will he pay for his much, much lower rates? Well, he doesn’t say.
In fact, he doesn’t even begin to say. His budget doesn’t name even one
tax deduction, exclusion, credit, or loophole that will be closed. All
he says is that he will pay for his lower rates, or at least the House
Ways and Means Committee, which is in charge of writing any tax reform
bill, will pay for them.
But he doesn’t say that they’ll pay for them while keeping the tax code as progressive as it is today.
Nowhere does it say the final bill needs to retain the current progressivity of the code.
That’s likely because it would be impossible to enact the kind of
reform Ryan’s previewing while retaining the progressivity of the tax
You’ve watched this debate play out before. During the election, Mitt
Romney had an ambitious tax reform plan, a promise to pay for it, and
no details. So the Tax Policy Center undertook
an incredibly generous analysis in which they assumed that Romney would
wipe out every single deduction for the rich before touching any tax
breaks for the non-rich. It still wasn’t enough. And Ryan’s plan, as the
Center on Budget and Policy Priorities notes, would be even tougher to
Even with the same dramatic scaling back of tax
expenditures for filers with incomes above $200,000 that TPC examined in
its Romney analysis — including entirely wiping out their deductions
for mortgage interest and charitable giving — families with children
that have incomes below $200,000 would have to face tax increases
averaging more than $3,000 a year, if policymakers were to avoid
increasing the deficit while reaching Chairman Ryan’s 25-percent
Now, Ryan has a bit of wiggle room here. As mentioned above, any tax
reform that qualifies for his budget “substantially lowers rates for
individuals,” but it doesn’t necessarily lower them all the way to 10
percent and 25 percent. That’s just “a goal.” Here’s the full section:
Substantially lowers tax rates for individuals, with a
goal of achieving a top individual rate of 25 percent and consolidating
the current seven individual income tax brackets into two brackets
with a first bracket of 10 percent
Compare that to the language on corporate taxes:
reduces the corporate tax rate to 25 percent
See the difference?
Ways and Means could,
in theory, decide the 10/25 goal is too hard to meet, and their tax
reform bill will end with a 20 percent rate and a 32 percent rate. That
would be considerably easier to pay for. But Ryan is in touch with Rep.
Dave Camp, the chairman of the House Ways and Means Committee. It’s
unlikely he’s committing Republicans to goals that Camp doesn’t intend
to come anywhere near reaching. And if Ryan and the Republican Party
wanted to assure the country that their tax reform proposal would keep
the code’s current progressivity, they could have said so.
[T]he eventual tax reforms are likely to include a significant tax
increase on many Americans, and significant tax cuts for those at the
This is completely ass-backwards (regressive). The tax code needs to be made more progressive by adding new higher marginal tax rate brackets at the top of the income scale, as the Progressive Caucus Budget does. Any time you hear a Tea-Publican talking about lowering rates, or flattening rates, or simplifying rates, or ultimately their flat tax fantasy, what they are really talking about is shifting the tax burden to lower income earners and giving a huge windfall to income earners at the top. All GOP tax plans are about serving their political benefactors, the über rich wealthy elite of the plutocracy.
And before any "trickle down" dead-enders start crying about how "Democrats want the largest tax increase in history!" (not true), some historical perspective is in order. Progressives' top tax rate: below Eisenhower's, Nixon's:
There is nothing magical about the Flimflam Man's homage to Calvin Coolidge's top rate of 25%. The American middle-class was built during the post-World War II era when the top marginal tax rate was over 90%. The Progressive Caucus Budget by comparison only imposes a top rate of 49%, well below the rates during the heydays of the American economy and middle-class.