In other words, this is a highly regressive tax plan. I was about to say that distributional results of the tax plans of today’s Republican candidates are even more skewed, but I was somewhat surprised to find that the Trump results look quite similar to those from the Ryan budget (see Table 5 here).
So what is Ryan saying here? At one level, I’d paraphrase thusly: “Maybe if people didn’t see how we’re trying to screw them, they wouldn’t be so pissed off.”
But let’s not be so cavalier and dig a bit deeper. He disparages the idea that it’s “up to government to redistribute the slices more equitably.” I disagree in the sense that progressive taxation or anti-poverty policy, like the EITC, should legitimately play that role, but I can at least see why he’d say that.
The problem is, however, and it’s a huge one: how do you get from “the government shouldn’t distribute more equitably” to “the government should distribute much more inequitably?!” These Republican tax plans seem to be solving the problem that rich people aren’t rich enough in America. And then they scratch their heads, bewildered why their electorate is abandoning their establishment.
I think he’s also probably wrong that a lot of people disbelieve the economy is “zero sum.” That is—and he’s right to cite Sen. Bernie Sanders’s unexpected rise in this context—there are many in the electorate who clearly do believe that the rise in inequality of income, wealth, and political power—evidenced by some people’s ability to tank the economy and then get a bailout—is, in fact, costing them. The “economy is rigged” is a very powerful meme these days.
In this regard, distributionally neutral tax plans are actually a low bar. What many would like to see is more progressive tax reform to offset some of the increase in pretax inequality. We can argue whether that’s a reasonable desire, but I find it very hard to argue a) what people really want is the opposite: more regressive tax plans, or b) families would be better off if they didn’t know the impact of tax proposals on their incomes.