When it comes to tax reform, it appears House Budget Committee Chairman Paul Ryan’s courage failed him. Various pundits and Washington columnists have been falling all over themselves to praise the bravery of Rep. Ryan (R-WI) in offering a federal budget plan that abolishes Medicare, slashes services for the middle class, and yet somehow manages to keep the bonus Bush tax cuts for the wealthy. But what these instapundits are missing is the fact that Rep. Ryan’s plan for the tax side of the ledger is remarkably opaque and is almost certain to raise taxes on the middle class, and that its opacity is deliberately obscuring that tax hike. That doesn’t seem so brave to me.
Rep. Ryan’s budget simply doesn’t describe exactly how his tax plan would work, instead resorting to broad bullet points that conveniently skip over important details. Nonetheless, the broad outlines of his tax plan are to:
- Maintain the Bush-era tax cuts beyond their expiration in 2012 and cut the top individual tax rate down to 25 percent from 35 percent
- Consolidate the current six tax brackets into some, unspecified, fewer number of brackets
- Keep overall tax revenue levels the same
- Pay for the enormous tax cut for the top by eliminating or curtailing some, unspecified, tax expenditures
Without the missing details this is nothing but pure political boilerplate. Which brackets are going to be consolidated? What will the new rate structure be? Which tax expenditures will be eliminated? Which will be limited and how? Rep. Ryan doesn’t tell us. There is no plan here.
That’s probably on purpose since any detailed description of his ideas for tax “reform” would reveal a massive tax hike for the middle class. For Rep. Ryan to cut the top rate by nearly one-third and still keep tax revenue the same as it would have been under President’s Bush tax-cut regime means he’s going to have to raise taxes somewhere else. And though he pointedly refuses to tell us where those tax hikes will come from, we can make an educated guess.
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