The price tag on Paul Ryan’s tax reform: $5.7 trillion

March 15, 2013

The Tax Policy Center is out with its preliminary analysis of the tax plan in Paul Ryan's latest budget, which sets two rates of 10 and 25 percent and promises to make up the difference in tax expenditure cuts to be specified later. The distributional numbers are only mildly interesting, given that we don't know what form those deduction/credit cuts will take. But the TPC estimates of how much revenue Ryan has to make up through those cuts are striking:

That's a $5.7 trillion hole. By comparison, every itemized deduction in the federal tax code adds up to less than $2 trillion, and that's with higher rates than Ryan has (which means that deductions are more valuable, and eliminating them raises more revenue). Ryan has set up a rather imposing task for himself.

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Neil Irwin · March 15, 2013