Rep. Ryan’s Reverse-Robin-Hood Budget Plan
http://www.offthechartsblog.org/rep-ryan%e2%80%99s-reverse-robin-hood-budget-plan/
Posted by: Paul N. Van de Water
Posted in: Children’s Health Insurance Program, Congressional Action, Deficits and Projections, Federal Budget, Federal Tax, Health Policy, Health Reform, Individuals and Families, Medicaid, Medicare, Other Issues, Reform Proposals, Social Security, Taxes and the Economy
Rep. Paul Ryan and his budget plan are getting a lot of respectful attention in the press. (See here and here.) New York Times columnist Matt Bai suggests Ryan’s plan might represent “the starting point in what could be a serious negotiation about entitlements and spending.” But a careful look at the plan shows it to be a radical blueprint to shift massive resources from the broad majority of Americans to the very wealthy, while leaving the budget on an unsustainable course for decades.
Tax cuts for the wealthy; tax increases for the middle class. The Ryan plan would give the most affluent households a new round of large tax cuts by reducing the top income tax rates; eliminating income taxes on capital gains, dividends, and interest; and abolishing the corporate income tax, the estate tax, and the alternative minimum tax. To offset some of the cost, the plan would place a new consumption tax on most goods and services, which would increase taxes on most low- and middle-income families.
The tax cuts for those at the very top would be historic. The richest 1 percent of Americans would see their taxes cut in half, and households with incomes above $1 million would receive a $502,000 tax cut each year, on average, according to the Urban Institute-Brookings Institution Tax Policy Center.
In contrast, about three-quarters of Americans — those with incomes between $20,000 and $200,000 — would face tax increases. Households with incomes between $50,000 and $75,000 would pay an extra $900, on average.
Debt would grow for decades despite massive program cuts. The Ryan plan would partially privatize Social Security and replace Medicare and most of Medicaid with vouchers whose value would erode over time, leaving low-income families, seniors, and people with disabilities less and less able to buy adequate health coverage on their own. Yet despite these huge cuts, the plan fails to achieve its advertised goal of fiscal responsibility because of its enormous tax cuts for the rich. Federal debt under the plan would rise over the next several decades to unsustainable levels far in excess of the size of the nation’s economy.
In March, after the Tax Policy Center and the Center on Budget and Policy Priorities demonstrated that revenues under the Ryan plan were inadequate to rein in rising debt, Rep. Ryan wrote, “If needed, adjustments can be easily made to the specified [tax] rates to hit the revenue targets and maximize economic growth.” More than five months later, we’re still waiting for Rep. Ryan to explain how he proposes to make his numbers add up.
More About Paul N. Van de Water
Paul N. Van de Water is a Senior Fellow at the Center on Budget and Policy Priorities, where he specializes in Medicare, Social Security, and health coverage issues.
Full bio | Blog Archive | Research archive at CBPP.org
This website is a godsend for those who hunger for rational analysis that go beyond the banal slogans we hear tossed around by so many of our political leaders and media pundits.
Paul Krugman called Paul Ryan the “flim-flam” man. The above article shows that Ryan is not only a con artist, but an absolute coward. Instead of playing the hurt feeling card, that people are being mean to him, it is incumbent on him to adjust his numbers so that they work.
If he wants all the accolades for being a bold visionary, he has to actually produce a real plan.
….thank you for explaining this plan. This is outrageous planning by the right to impoverish the masses and increase the wealth of the wealthy. I am suprised he didn’t throw into the mix a proposal to privatize all of the public pension plans, this would undoubtedly yeild great returns for wealthy investors!
One of the reasons we are sliding down hill with respect to our assets and our incomes is that people like this believe in get as much as you can for yourself,…it doesn’t matter if you bring the country to its knees. When the Bushes and Clinton occupied the White House we lost our sovereignty to the World Trade Organization with regard to globilization and trade. The US worked is subjected to unfair competitition and their jobs are eventually sacrificed on the alter of corporate greed. China, I am informed by Pat Choate, repeatedly is able to challenge are patents and the US Patent Office must publish patent applications within 18 months, giving away business secrets to China and other nation. Out wealthy coporate America does not care about sovereignty or promoting conditions that lead to a more prosperous nation, and, the worst of it is that they convince moderate republicans that privatization of America pensions, public assets, schools, etc., is the ultimate of the American Dream! Why do not our current leaders understand and move the country to higher ground? We must pull out all the stops to stop the privatization of the entire country, including Defense. If this sounds reformist it is not, it is getting the country back to having a country with a prosperous middle class where lower income citizens can expect a ladder of opportunity not ” you should be glad you have a job.” Many of us are well trained, but we are not paid for that training adeqeuately, therefore, because corporate entities prefer to pay the least to the employees who work for them and, expect more with less in order to enrich their top managers, we are locked in a battle where the only way out is for government to balance competing interests, which it can no longer do because of the intense influence of money and power. God help us!
If you took Rep. Ryan at his word, it seems like you could figure out what the rates would need to be in order to balance the budget. One scenario could assume that the income tax rates he proposed stay the same & all of the revenue shortfall is made up by increasing his plan’s consumption tax rates; and another would assume that the consumption tax rates stay where they are in his proposal & the income tax rates are adjusted to fill the gap. Something like that could be very illuminating, to the extent that it shows the rates needed to achieve budgetary balance within his proposed framework would have to be much higher than many supporters of the plan would be willing to endorse. I believe that’s what you would find, due to a little-noted aspect of his tax plan: because it excludes many types of income from taxation altogether, it requires relatively high rates in order to raise even moderate amounts of revenue. That defeats one of the plan’s purported goals, of promoting economic growth by keeping rates down.
keep up the good work.
cbpp.org and cepr.net still produce pragmatic, non-partisan analysis.
I continue to applaud the CBPP for producing responsible analysis and reporting on subjects that affect all Americans, but somehow seem to have nominal overt effect on the political process. Perhaps the effects are felt at a less public level. Please keep up the good work. I’m wondering if subsets of these various excellent analyses can be made available on social networking sites so that the can be disseminated more broadly to the public-at-large (perhaps they already are). Responsible NFPs, and non-partisan organizations, like yourselves will perhaps begin to have a more generalized educational effect nationwide that begins to mitigate the polarizing and numbing effect of partisan politics so that good to better policy can begin to flow from Congress.
Thanks for the kind words, Andrew. To answer your question about whether we have a social media presence, the answer is “yes.” You can find us on Twitter at http://www.twitter.com/CenterOnBudget and Facebook at http://www.facebook.com/CenterOnBudget.