Shocker: Paul Ryan's budget means more big tax cuts for the rich.
No surprise here, but the tax cuts in Paul Ryan鈥檚 2013 budget plan would result in huge benefits聽for high-income people and very modest鈥攐r no鈥� benefits for low income working households, according to a new by the Tax Policy Center.
TPC looked only at the tax reductions in Ryan鈥檚 plan, which also included offsetting鈥揵ut unidentified鈥揷uts in tax credits, exclusions, and deductions. TPC found that in 2015, relative to today鈥檚 tax system, those making $1 million or more would enjoy an average tax cut of $265,000 and see their after-tax income increase by 12.5 percent. By contrast, half of those making between $20,000 and $30,000 would get no tax cut at all. On average, people in that income group would get a tax reduction of $129. Ryan would raise their after-tax income聽by 0.5 percent.
Nearly all middle-income households (those making between $50,000 and $75,000) would see their taxes fall, by an average of roughly $1,000. Ryan would increase their after-tax income by about 2 percent.
Ryan would extend all of the 2001/2003 tax cuts, and then consolidate individual rates to just two鈥�10 and 25 percent. In addition, he鈥檇 repeal the Alternative Minimum Tax, reduce the corporate rate from 35 percent to 25 percent, and kill聽the tax provisions of the 2010 health reform law.
Earlier this week, TPC the tax cuts in Ryan鈥檚 budget would add $4.6 trillion to the federal deficit over the next decade, even after extending the 2001/2003 tax cuts, which would add another $5.4 trillion to the deficit.
Ryan argues that eliminating or scaling back deductions, credits, and exclusions ought to be part of the GOP fiscal plan. But he won鈥檛 say how.
Cuts in those tax preferences could make a big difference in determining who wins and who loses from the tax portion of his budget. But until House Republicans describe which they鈥檇 cut, there is no way to estimate what those base-broadeners would mean.
In truth, unless Republicans raise聽taxes聽on capital gains and dividends, it is hard to imagine the highest income households getting anything other than a windfall from this budget. Other tax preferences, such as the mortgage interest deduction, are just not that valuable to them.
And since no high-profile Republicans want to raise taxes on gains and dividends (and many would cut investment taxes even further) this budget would likely result in a huge tax cut for those who need it least. 聽That鈥檚 not a great way to start an exercise whose stated goal is to eliminate the budget deficit.
