GOP's State of the Union Responder Would Set Higher Taxes on Middle-Class Than Millionaires
Friday 21 January 2011
by: Pat Garofalo | Think Progress | Report
House Budget Committee Chairman Paul Ryan (R-WI). (Photo: Wikimedia)
House Budget Committee Chairman Paul Ryan (R-WI) was announced today as the Republican who will be responding to President Obama’s State of the Union address next week. Ryan has gained a (largely unearned) reputation as a fiscal hawk due to his radical Roadmap for America’s Future, under which the U.S. budget will eventually be balanced (after federal debt surpasses 100 percent of GDP), mostly via privatizing Social Security and Medicare.
According to an analysis by Citizens for Tax Justice, the Roadmap would raise taxes on 90 percent of Americans, while dramatically lowering them for millionaires. In fact, a new analysis from the Economic Policy Institute found that Ryan’s plan would ultimately translate into middle-class tax rates being higher than those for millionaires:
– The Roadmap would lead to the wealthiest Americans paying a lower average tax rate than most Americans. Eliminating taxes on capital gains, dividends, and interest, as the Roadmap proposes, would overwhelmingly help taxpayers at the top of the income distribution, who receive most or all of their income from capital. For example, Wall Street financiers could shelter all of their income as tax-free stock options or carried interest.
– Middle-class families earning between $50,000 and $75,000 a year would see their average tax rate jump to 19.1% (from 17.7%) under this plan—an increase of $900 on average [...]
– Millionaires would see their average tax rate drop to 12.8%, less than half of what they would pay relative to current policy
As EPI’s Andrew Fieldhouse concluded, under the Roadmap, “a long tradition of progressive taxation would be abandoned; millionaires and Wall Street bankers would pay significantly lower tax rates than middle-class workers…Income inequality would soar.”
Next week, on the same day that Obama delivers his address and Ryan gives his response, House Republicans will vote to endow Ryan with “stunning and unprecedented” powers to set discretionary spending levels that are binding on the House. The levels that Ryan has laid out, if actually enacted, would result in significant reductions to vital and popular programs like Pell Grants, the FBI, and the National Institutes of Health. This week, House Majority Leader Eric Cantor (R-VA) also called for “elements” of the Roadmap to be in the first GOP budget.
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Comments
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To those who didn't bother
Sat, 01/22/2011 - 14:46 — Anonymous (not verified)To those who didn't bother to vote on Nov. 2: see what happened? The Rethuglicans are now in charge and will do the bidding of the Robber Baron un-American Corporatist Fascist ruling class! FDR and TR are rolling in their respective graves!
Yep, throw the middle class
Sat, 01/22/2011 - 14:54 — Anonymous (not verified)Yep, throw the middle class and poor to the wolves. Hopefully, when they get old and are in Nursing homes there will be nobody to wipe their sorry greedy asses!
Republican Party to America,
Sat, 01/22/2011 - 15:56 — Anonymous (not verified)Republican Party to America, "let them eat cake."
Great article. One question
Sat, 01/22/2011 - 16:38 — Anonymous (not verified)Great article. One question though, this guy is proposing to drop the millionaire bracket from it's current 35% all the way down to 12.5%? That's way less than half. I can hardly believe that.
I don't understand Joe
Sat, 01/22/2011 - 17:02 — Gart van Gennip (not verified)I don't understand Joe Middleclass. I can understand you admire the rich for their success, but why reward them by letting them keep a higher percentage of their money than you? I don't get how a conman like this guy can even propose such a thing without batting an eyelid. Society needs to be paid for. How can you not let the strongest shoulders carry the heaviest load? Incromprehensible!
Remember, people, this is
Sat, 01/22/2011 - 18:54 — E. (not verified)Remember, people, this is the House, not the Senate. A proposals is just that, proposed, not mandated. These are people who do not live in the real world with the rest of us. For them, this is a game of Monopoly. When they leave the House, they go home and play a game called Life.
And to think this
Sat, 01/22/2011 - 20:45 — Anonymous (not verified)And to think this brainwashed, greedy, misguided clown was elected. By whom? and of what mental aberration?
Its almost like he is trying
Sat, 01/22/2011 - 21:21 — Anonymous (not verified)Its almost like he is trying to start massive class warfare between the rich and the rest of the country.
I cannot in good conscious allow this to happen without a fight!
I am not sure what I personally can do about it, but if this happens as far as I am concerned it is an Act of War against the American people.
Yes, its gotten to that point where most of us no longer can consider the rich as Americans.
They are not doing their part in American any longer. They are not creating jobs, not paying taxes, not investing in the nation they live or the people they live around.
I know some wealthy people and have talked to them about this and their typical response is " I don't care about the poor or anyone else except me and mine "
One of those was so nasty about it, I knocked the hell out of him and left him laying. Never have talked to him again, the sorry SOB!
I am not advocating violence, but some very hard laws are going to have to be passed on the local and state levels to keep our wealth creation from leaving this nation and benefiting others while leaving us with nothing.
All government grants need to be cut off from established companies and only provided to new business owners who have no connection to any of the major international corporations currently in place.
We need new blood in industry. We need to spread wealth around again. a time is coming when 80% of the wealth in 20% of the people is not going to be tolerated by the other 80% and that time cannot be too soon.
I am not advocating welfare, however the handouts given in this nation need to be deeper and broader in an attempt not only to help people survive, but to prosper and become tax paying citizens who own tax paying businesses and property tax paying homes.
Food stamps and welfare are not enough. That crap just depresses the people on it because they know that no matter what they do, in the end they are still slaves.
We need real jobs that actually create wealth and allow families to prosper. Thats not going to come from multinational corporations who are steadily eliminating even the foreign jobs with automation technologies and robots.
Either this needs to stop or we need to abandon capitalism all together, because we as a caring society cannot allow the misery that this is causing nor the perfect storm of unemployment that will occur in our future if we don't stand up and say what is and is not acceptable.
The time of caring just for yourself and yours must end peacefully or these predators are going to bring violence upon themselves and all of us because of their behavior.
I know all of you would support putting someone in prison for robbing a bank. Why not support putting someone in prison for stealing money out of this nation by sending jobs overseas and then shipping the products back here siphoning money out of the economy without putting any back in return. No jobs, no taxes, what the hell are these companies even doing here. They are not good neighbors and we need to get them out of our neighborhood and country if they continue this type of behavior.
The Bush Administration
Sun, 01/23/2011 - 02:29 — labman57 (not verified)The Bush Administration worked long and hard to undermine the economic viability of the American middle class. It has no doubt been a source of great frustration and anguish to conservatives to see all of their efforts jeopardized by Obama and the Congressional Democrats during the last two years.
The current Republican-controlled House is licking its chops anticipating the opportunity to complete the "destruction of the middle class" mission that Bush and Cheney began.
So how does the GOP plan to improve the nation's economic viability? By defunding health insurance reform, shifting the fiscal burden of its implementation onto the national deficit, further demonstrating that reducing said deficit is clearly not one of their priorities.
Yep, Republicans sure do talk the talk about federal spending, even when proposed programs will be fully funded.
And yet the federal deficit was apparently not much of an issue when it came to extending disproportionately huge tax cuts to the ultra-wealthy so that they can go on a couple more exotic vacations next year.
Priorities ...
Need significant budget reductions? We can begin by eliminating federal subsidies to the fossil fuel industries. Follow it up with eliminating Defense Dept pork projects as has been proposed by the White House.
Of course, that will never happen. Why? The GOP has absolutely no problem with the federal government spending billions of taxpayer dollars on a whole variety of projects and programs, especially those that deliver taxpayer funds to their home states and congressional districts. They DO object to spending money on any programs that conflict with their personal ideologies and political agendas.
Yes, I can see a class war
Sun, 01/23/2011 - 11:48 — Anonymous (not verified)Yes, I can see a class war in our lifetime!!!...The rich will be devastated quickly!!!...Maybe that is what we need to bring our country back to common reasoning and civility!!!.....War is never the answer but what else is the middle class to do??...
>> "To those who didn't
Sun, 01/23/2011 - 12:26 — wunsacon (not verified)>> "To those who didn't vote..."
I'm not voting for DINOs.
Part of my income comes from
Sun, 01/23/2011 - 12:40 — Anonymous (not verified)Part of my income comes from wages and part from capital gains (and very little from dividends and interest), so I see both worlds. Frankly it doesn't made sense to me why long term capital gains and "qualified" dividends get taxed at a lower rate than wages. Same for home mortgage interest being tax deductible while other forms of interest paid are not. If the intent is to encourage investment, I think tax policy is the wrong way to go about it. Ironing out these inconsistencies would make tax rates fairer in my opinion.
And I don't think the simple answer (100% tax rate) fixes anything-- except for inequality.
Tax the rich, feed the poor
Till there are no rich no more
I'd love to change the world
But I don't know what to do
So I'll leave it up to you
Here's a few facts to keep
Mon, 01/24/2011 - 17:07 — AnonymousDV (not verified)Here's a few facts to keep in mind... it used to be good politics to promote general welfare and have a strong middle class. The reason for this was clearly stated by Henry Ford when he justified his paying assembly line workers enough money so they'd be able to buy the product they produced. Not so any more! With globalization came access to a much larger market than that found in our country. Now it makes economic sense to keep workers poor and desperate. This forces them to take jobs at a MUCH LOWER wage. How can the capitalists sleep at night making these plans? That's easy. They are being told that God has given them their riches as a reward for their righteousness.
With the existing lower
Tue, 01/25/2011 - 03:11 — MeasureTwice (not verified)With the existing lower rates for capital gains, middle class workers already pay higher taxes as a percentage of income than do billionaires, according to Warren Buffet.