The Tax Policy Center, bless their hearts, ran the numbers on Rep. Paul Ryan's tax reform goals. The headline is that he'll need to find $5.7 trillion deductions, exclusions, and other tax breaks to make his plan revenue neutral, as he's promised to do.
But they also put out a table showing what would happen if Ryan passed his plan without paying for a dime of it. The answer is a huge tax cut -- mainly for the rich. Those numbers are getting a lot of attention, with favorable citations from Steve Benen, Greg Sargent, Matt Yglesias, and others. Here's a chart from Benen:
Those numbers, however, are worthless as a description of Ryan's plan. We don't know what Ryan's tax reform will ultimately look like. The 10 percent and 25 percent brackets, his budget says, are just a "goal," and may well be sacrificed. But the revenue neutrality is not. If you read the legislative text of his bugdet, the instructions are clear:
It is the policy of this resolution that Congress should enact legislation during fiscal year 2014 that provides for a comprehensive reform of the U.S. tax code to promote economic growth, create American jobs, increase wages, and benefit American consumers, investors, and workers through revenue-neutral fundamental tax reform, which should be reported by the Committee on Ways and Means to the House not later than December 31, 2013.
A revenue-negative tax reform would actually disqualify the legislation from the budget's included reconciliation instructions.
What TPC's numbers suggest is that if Ryan -- or House Ways and means Chairman Dave Camp -- is going to achieve his "goal" of revenue-neutral tax reform that ends with a 10 percent and a 25 percent bracket, it's going to be extraordinarily difficult to avoid putting much of that burden on the poor and the middle class.
And perhaps that's fine with them. Notably, neither the budget document nor the legislative text sets any conditions, or even any goals, for the progressivity of the reformed tax code. There's language about simplification, and a more competitive international system, and lower marginal rates, and revenue neutrality, but nothing at all on progressivity.
But TPC's numbers are totally misleading as an estimate of what Ryan's tax cut is actually likely to be. While we have frustratingly little information on what the House Republicans tax reforms will actually look like, one of the few things we do know is that it won't be a $5.7 trillion, across-the-board cut. In fact, the truth is probably closer to the opposite: If Ryan and Camp are going to stick to the 10%/25% rate goals, they're almost certainly going to end up raising taxes on a huge number of Americans.