"House GOP Budget Would Give Millionaires A $200,000 Tax Cut"
The latest House Republican budget would grant taxpayers with incomes above $1 million at least $200,000 in tax cuts even if the GOP closes tax loopholes to help pay for the plan, according to an analysis from Citizens for Tax Justice.
The GOP plan, authored by Budget Committee Chairman Paul Ryan (R-WI), aims to reduce the top income tax rate to 25 percent and repeals many other taxes on the rich, including the Alternative Minimum Tax and increases included in Obamacare. Ryan wants to pay for the tax cut by closing loopholes and ending tax expenditures. The budget didn’t specify which loopholes and expenditures would be eliminated, but even if all of them that benefit the rich were done away with (except for preferences for capital gains and other investments, which Ryan has said he will keep), the budget would grant millionaires a tax cut in excess of $200,000. If it doesn’t eliminate loopholes, the tax cut would only grow larger, CTJ found:
In fact, under Ryan’s plan taxpayers with income exceeding $1 million in 2014 would receive an average net tax decrease of over $200,000 that year even if they had to give up all of their tax expenditures. These taxpayers would see an even larger net tax decrease if Congress failed to limit or eliminate enough tax expenditures to offset the costs of the proposed tax cuts.
Like former GOP presidential candidate Mitt Romney, Ryan insists that his plan will simultaneously grant a large tax cut to the wealthy, avoid tax increases on the lower- and middle-classes, and maintain the current level of revenue. The Tax Policy Center found during the election that those goals were impossible to maintain under Romney’s proposal and that to avoid adding to future deficits and debt, the plan would have to raise taxes on the middle class by an average of $2,000.
The current House GOP proposal provides an even bigger tax cut, making it even less likely that Ryan could raise sufficient revenues from the closure of tax loopholes to offset the estimated $5.7 trillion cost. To pay for the plan, then, the GOP would have no choice but to raise taxes on the middle class (by an average of $3,000) while granting a massive tax cut to millionaires. If it doesn’t, the Republican plan to reduce the debt will instead add trillions of dollars to it.