Tumble DC 25

Marginally better than silence

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The above chart represents debt as a percentage of GDP over time. The low red bar is what Paul Ryan says his budget would produce. If you actually look at the numbers though, the truth is the the plan produces debt much closer to the blue at the top. So how does Ryan get away with such an extreme discrepancy? Well, he insists that with lower taxes will “broaden the tax base” and “maintain revenue growth”. Here’s the thing- even assuming that he’s right and the tax base broadens and it generates more revenue, the high end estimate of that is at the dotted line, with a more reasonable estimate represented by the slashes. As you can see, Ryan still drastically overestimates revenue growth- assuming the economy picks up in the first place, which is a pretty poor assumption.

With these tax cuts blowing the lid off of Ryan’s deficit reduction, his proposed evisceration of Medicaid, the social safety net, and public investments is exposed for what it really is: An attempt to gut the federal government and refund the tax bill to the highest-income households, not reduce the deficit. Some $5.3 trillion in non-defense spending cuts—nearly two-thirds of which come from programs for lower-income households—would roughly finance the $5.4 trillion cost of maintaining the Bush-era tax cuts, reduced estate and gift taxes, and the AMT patch. Ryan’s additional $4.5 trillion in tax cuts—two-thirds of which would go to households earning over $200,000—would be financed with a combination of increasing deficits and reducing tax expenditures other than preferential rates on unearned income, thereby shifting the distribution of the tax burden toward the middle class. Nothing screams fiscal charlatan like trillions of dollars worth of tax cuts skewed toward the affluent but financed by gimmicks and abdication of longstanding commitments to seniors, children, and the disabled.

The above chart represents debt as a percentage of GDP over time. The low red bar is what Paul Ryan says his budget would produce. If you actually look at the numbers though, the truth is the the plan produces debt much closer to the blue at the top. So how does Ryan get away with such an extreme discrepancy? Well, he insists that with lower taxes will “broaden the tax base” and “maintain revenue growth”. Here’s the thing- even assuming that he’s right and the tax base broadens and it generates more revenue, the high end estimate of that is at the dotted line, with a more reasonable estimate represented by the slashes. As you can see, Ryan still drastically overestimates revenue growth- assuming the economy picks up in the first place, which is a pretty poor assumption.

With these tax cuts blowing the lid off of Ryan’s deficit reduction, his proposed evisceration of Medicaid, the social safety net, and public investments is exposed for what it really is: An attempt to gut the federal government and refund the tax bill to the highest-income households, not reduce the deficit. Some $5.3 trillion in non-defense spending cuts—nearly two-thirds of which come from programs for lower-income households—would roughly finance the $5.4 trillion cost of maintaining the Bush-era tax cuts, reduced estate and gift taxes, and the AMT patch. Ryan’s additional $4.5 trillion in tax cuts—two-thirds of which would go to households earning over $200,000—would be financed with a combination of increasing deficits and reducing tax expenditures other than preferential rates on unearned income, thereby shifting the distribution of the tax burden toward the middle class. Nothing screams fiscal charlatan like trillions of dollars worth of tax cuts skewed toward the affluent but financed by gimmicks and abdication of longstanding commitments to seniors, children, and the disabled.

Filed under Economic Policy Institute Tax Policy Center Paul Ryan

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