Ryan may not be the hard-nosed, number-crunching policy wonk he’s often portrayed as in the press, but he is certainly a man of substantive beliefs. Unlike his Senate counterpart Mitch McConnell (R-Ky.), who plainly has no sincerely felt goal other than acquiring and holding power, Ryan has policy changes he desperately wants to see. Among them, only destroying the safety net can rival his deep and abiding wish that America might ease the burden of taxation under which our country’s rich, super-rich and corporations suffer so unjustly.
According to excerpts of his speech released in advance, he’ll tell his audience: “We need to get this done in 2017. We cannot let this once-in-a-generation moment slip.” While cutting taxes might slip into 2018, Ryan is basically right. It may not be quite a once-in-a-generation opportunity, but it only comes along when Republicans have unified control of government — which they might only have until 2018.
While Ryan may not get everything he wants out of tax reform, he stands a very good chance of getting most of it. Republicans will move heaven and earth to pass something not because they feel pressure from their constituents — Americans are not exactly crying out for tax cuts — but because they believe in it. If we can’t cut taxes on the wealthy, they ask each other, then why are we here? What’s the point of having power if you don’t use it for this? So here’s what Ryan is proposing to do, per the speech excerpts:
- Lower income-tax rates
- Reduce the number of tax brackets
- Raise the standard deduction
- Eliminate the inheritance tax (Big congrats to Donny Jr., Eric, Ivanka and Barron for not having to worry about paying taxes! Oh, and Tiffany — she’ll probably get something, too.)
- Eliminate the Alternative Minimum Tax, which is meant to ensure that the wealthy can’t get away without paying anything
- Eliminate unspecified loopholes
- But keep the mortgage interest deduction and charitable giving deduction
- Cut the corporate tax rate
- Allow corporations to pay reduced taxes on profits they bring back from overseas
- Institute a border adjustment tax to favor exports over imports
Among these, only the increase in the standard deduction is aimed at the non-wealthy. As the Tax Policy Center wrote last year about an earlier version of this plan:
Three-quarters of total tax cuts would go to the top 1 percent, who would receive an average cut of nearly $213,000, or 13.4 percent of after-tax income. The top 0.1 percent would receive an average tax cut of about $1.3 million (16.9 percent of after-tax income). In contrast, the average tax cut for the lowest-income households would be just $50.
While the figures for this latest iteration will vary somewhat, the essential idea will be the same. This is part of the Republican tax template going way back: Make sure that even lower-income people get something in your tax cut, even if it’s tiny and the vast majority of the benefits go to the wealthy. Then you can say, “This isn’t about the wealthy — we’re cutting taxes for everybody!”
There are differences among Republicans on some points. For instance, many of President Trump’s economic advisers don’t like the border adjustment tax (which is essentially a big tariff on imported goods that would be paid by consumers), which means it will probably be dropped. But the good news for Ryan and Republicans is that even if cutting taxes for the wealthy isn’t popular, it tends not to generate intense, concentrated resistance of the kind that makes members of Congress skittish about voting for it.
That’s because, unlike health-care reform, taxes are not an issue where it’s easy (or even possible) for citizens to see a direct harm Republican policies might do to them. If I take away your coverage or enable insurers to deny you coverage because of your preexisting condition, you’ll know that’s bad for you. But if I give a tax break to the millionaires who live in that gated community on the other side of town? You may think it’s unfair and you may not like it, but since it doesn’t seem like it will have an immediate impact on you, you’re much less likely to march in the streets or call your member of Congress to stop it from happening.
Furthermore, Ryan and the Republicans know that the public has virtually no historical memory, which enables the GOP to make bogus arguments about taxes and convince many people that they’re true. Why is it necessary to make these tax cuts? “Because this will create jobs,” Ryan will say in his speech, according to the excerpts. “That is what this is all about: jobs, jobs, jobs. Good, high-paying jobs.”
Just like all those millions of high-paying jobs that were created when George W. Bush passed a similar set of tax cuts for the wealthy in 2001 and 2003, which brought about the economic nirvana of explosive job and wage growth Republicans like Ryan promised the tax cuts would produce. That’s what happened, right?
That’s not what happened, of course — just the opposite. But Paul Ryan is undeterred. He’s a man of substance, but he’s no empiricist. What experience teaches him about the world we live in is far less important than the dream that implanted itself in his heart when he read “Atlas Shrugged” as an impressionable youth. Whatever else does or doesn’t make it through Congress, Ryan will get his tax cuts.