House Budget Committee Chairman Paul Ryan (R-WI) previewed the latest version of his budget, which he will formally unveil today, in an editorial in the Wall Street Journal, and the proposal closely mirrors both his past budgets and the plans he and Mitt Romney laid out during the 2012 presidential campaign. Like the Romney-Ryan 2012 plans, this version includes massive budget cuts to safety net programs and a major overhaul of the tax code that will largely benefit the wealthy and corporations.
As the 2012 budget did, the 2013 version reduces the number of income tax brackets from six to two, with marginal rates set at 10 percent and 25 percent. It is expected to stick to Ryan’s past tax proposals as well by repealing the Alternative Minimum Tax, cutting the top corporate tax rate to 25 percent, and converting the corporate tax code to an “international” system.
Estimates showed that past plans amounted to $3 trillion tax giveaways to the wealthy, but because of tax increases that took effect in 2013, Ryan’s newest tax cut is even larger. The federal government in all would lose a total of $7 trillion in revenue, according to Center for American Progress Tax and Budget Policy Director Michael Linden, the majority of which would go to the richest Americans and corporations. Reducing the corporate income tax to 25 percent would provide a tax break of more than $1 trillion; further tax changes would result in even bigger cuts. Trillions more would go to the wealthy.
Ryan again insists that those tax cuts won’t actually be realized, since any reform will be neutral thanks to the closure of tax loopholes. But he made similar claims in both 2011 and 2012, and in neither of those instances did he offer specific loopholes for closure, likely because doing so would have proven politically impractical.
Romney and Ryan also insisted that their proposal would cut taxes for every American (especially the wealthy) while not adding a dime to the federal deficit, but nonpartisan analysts found that upholding both of those standards was impossible. The Tax Policy Center found that Romney’s plan would have to make up $4.8 trillion through the closure of tax loopholes; failing that, he would have no choice but to add to the deficit or raise taxes by $2,000 on the average middle class family. Ryan’s version will have to make up even more revenue to avoid similar pitfalls.
Ryan has also stuck to the same spending principles of past budgets. He again turns Medicare into a voucher program and converts many social safety net programs to block grants modeled after the failed 1996 welfare reform law. Those plans would result in higher health care costs to seniors and major cuts to the social safety net, all while his plan gives a massive tax break to the richest Americans.