When black smoke billowed from the Vatican chimney this afternoon, I couldn’t help but wish that the latest version of “The Path to Prosperity” from Rep. Paul Ryan (R-Wis.) was its source. From its reliance on a repeal of Obamacare to an assumption that “the U.S. economy will grow faster than spending,” the plan put forth by the House Budget Committee chairman ought to be burned because it can’t possibly be taken seriously.
Any budget plan that has as its foundation the repeal of President Obama’s signature health-care law is dead-on-arrival. But the Tax Policy Center (TPC) points to two other reasons why Ryan’s path is pockmarked with problematic assumptions.
Greg Sargent at Plum Line highlights TPC’s warning about the tax perils for the middle-class. “[Ryan] has made it impossible to determine whether his budget would raise taxes on the middle class to pay for tax cuts on the rich,” he writes. That’s because his call for a top tax rate of 25 percent is merely a “goal.” Also, Sargent points out, Ryan is mute on rates on capital gains and dividends.
There is an apparent method to leaving these two things vague. It makes it impossible to say whether the plan can be paid for without targeting loopholes enjoyed by the middle class. According to the Tax Policy Center…, without this information, it’s impossible to say whether the plan’s stated goals are feasible.
In his analysis of the Ryan plan, TPC’s Howard Gleckman shows the incredible game of charades being played.
Under the 2010 health law, high-income households will pay an additional 0.9 percent Medicare payroll tax and a new 3.8 percent levy on investment income such as capital gains and dividends. ATRA [the fiscal cliff deal] restored the old 39.6 percent tax bracket for top-bracket households.
Ryan would repeal all of Obamacare, including its new taxes. And he’d roll back the top tax rates in ATRA. But by assuming the level of revenues both laws would collect, Ryan makes it easier to balance his budget in 10 years since current law brings in higher revenues.
Thus this budget now accepts the extra revenues (though not the specific taxes) that Ryan and Hill Republicans so vehemently opposed just two months ago.
In case you couldn’t follow the bouncing ball, Ryan wants to repeal Obamacare and its taxes, but keeps the cash derived from it in his plan in order to bring his books into balance. I’m neither a tax nor budget expert. But I know when something is not serious or doesn’t make sense. And Ryan’s budget is neither serious nor makes sense.
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