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Tag: tax increase
Study: Ryan’s Budget Would Cut Taxes On The Rich By At Least $200,000

Study: Ryan’s Budget Would Cut Taxes On The Rich By At Least $200,000

To the surprise of no one, a new study by Citizens for Tax Justice (CTJ) shows that the budget proposed by Rep. Paul Ryan (R-WI) will overwhelmingly benefit the United States’ top earners.

CTJ is the same research institution that correctly reported just how generous Mitt Romney’s and Ryan’s tax plans would be to the wealthy during the 2012 presidential election. Most notably, CTJ reported about Rep. Ryan’s previous budget proposal, “[The] federal government would collect $2 trillion less over a decade and yet require bottom 90 percent to pay higher taxes.”

At the crux of Ryan’s budget is a promise to implement large tax cuts, while — somehow — not reducing the revenue collected by the federal government. A crunch of the numbers by CTJ shows this is possible only by providing the wealthy with tax cuts and likely offsetting the lost revenue with a tax increase on low earners.

According to the study, there are two notable tax reforms included in Ryan’s budget proposal: a variety of tax cuts, and the closing of tax loopholes and special breaks through a limit on tax expenditures by Congress. While closing tax loopholes is a good talking point for Republicans, it will not pave the way for wealthy Americans to pay a higher income tax rate. In fact, according to the study, Americans who earn more than 1 million dollars a year will average a net tax decrease of $200,000, even with the limit on tax expenditures.

The study shows two scenarios for how the Ryan budget will affect high-income households in the United States. If tax expenditures are limited and loopholes are closed, high-income households will enjoy a significant net tax decrease, as made clear in the below table. In another scenario, the tax expenditures will not be cut and high-income households will benefit from an even larger tax decrease.

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Americans who earn far less than $1 million a year will likely not benefit from such a decrease. Because the Ryan budget calls for the federal government to collect the same amount of revenue, a tax increase on lower earners will necessarily have to be implemented.

To top everything off, the Ryan budget calls for a repeal of the Affordable Care Act and all the tax increases associated with the law. The rich would benefit from this as well: The plan would reform the Medicare Hospital Insurance tax, ending the higher rate for high-income earners currently in place.

Photo: Speaker Boehner via Flickr

Far More Republicans Believe In Climate Change And Evolution Than The Ever-Shrinking Deficit

Far More Republicans Believe In Climate Change And Evolution Than The Ever-Shrinking Deficit

A new Pew Research poll is getting a lot of attention because it shows the share of Republicans who believe in evolution has declined 11 percent since 2009, down to just 43 percent. In 2009, 54 percent said that human beings had “evolved over time.”

A quick poll of 2008 Republican candidates for president found that 7 out of 10 recognized the science of evolution. No such poll was taken during the 2012 GOP primary but not one of the eight candidates said he or she would be willing to accept a tax increase, even if it were paired with spending cuts at a rate of 10 to 1.

But in 2013, after the Bush tax rates expired, Congress voted to end the tax breaks for those earning $400,000, along with slightly higher taxes on capital gains and inheritances. The resulting increase in revenue along with budget cuts and the fastest growing job market since 2005 have resulted in a deficit that’s falling at nearly record rates.

The deficit was cut by $409 billion, or 37 percent, from the last fiscal year to $680 billion—$170 billion less than the Congressional Budget Office originally predicted.

While these numbers are still large, they’re even more impressive when you consider the key metric economists look at — deficit as a share of gross domestic product.

The White House presented this chart to illustrate how significant the reduction actually is:

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By actual dollar amounts and as a share of GDP, the budget deficit is falling — quickly.

Yet for some reason, the percentage of Republicans who believe deficit reduction is occurring is a fraction of those who believe in evolution or even climate change.

Only 12 percent of Republicans believed that progress was being made in reducing the deficit in a Pew poll released earlier this month — even though the deficit shrunk by more than a third!

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This matches a Bloomberg poll in October that showed two-thirds of Republicans, including 93 percent of Tea Partiers, believed the deficit was actually growing.

In an economy where millions are out of work, deficit reduction is most likely harmful. But the media goes out of its way to depict a deficit as inherently evil, while neglecting to make clear that it is actually shrinking precipitously.

When it comes to politics, most people are guilty of what Chris Mooney labels “motivated reasoning.”

Though climate change and evolution are theories that are accepted by the vast majority of scientists, they are still theories. The deficit, however, unquestionably exists. It was much larger the year before than it is now. Only 1 out of 10 Republicans is willing to accept this reality.

Before we start worrying about the right accepting scientific theories, let’s first try to get them to agree that facts exist.

Photo: Gage Skidmore via Flickr

They Have It Worse: Greece Approves More “Brutal” Budget Cuts

Having already faced off intense–and violent–public opposition to immense austerity measures, Greeks got another taste today:

Greece has approved an austerity bill that helps pull their debt-ridden country back from the brink of an immediate default. After days of public unrest and impassioned debate, the Greek parliament voted 155-138 on Wednesday in favor of the controversial bill, which authorizes $40 billion in brutal budget cuts and tax hikes over the next several years for a nation already reeling from previous belt-tightening measures.

The tense legislative showdown came as the country continued to squirm in the grip of a 48-hour nationwide strike and as tens of thousands of angry protesters thronged downtown Athens in noisy opposition to the austerity package. Police in riot gear scuffled with some demonstrators and tried to contain the kind of violence that on Tuesday left dozens of people injured, shop windows smashed and tourists running to escape tear-gas fumes.

The government says the new spending cutbacks — some of the toughest in recent memory — are imperative if Greece is to stave off having to declare bankruptcy in a matter of weeks.

Without the new austerity package, the European Union and the International Monetary Fund have threatened to withhold the next installment of funds from the financial bailout they granted Greece last year. That would leave Athens unable to pay bills coming due in mid-July.

For all of the outrage at spending cuts–threatened and real–American workers continue to be relatively polite in their anger compared to their European (Socialist) counterparts, as the peaceful protests in Wisconsin and other states that have curtailed workers’ rights and benefits have shown.

After The Showdown: Is The GOP Getting Ready To Cut A Deal On The Debt Ceiling?

The following post is by Joe Conason, National Memo’s editor-in-chief.

Nothing becomes Mitch McConnell, the Senate minority leader, like his silence after meeting with President Obama to negotiate an increase in the debt ceiling – especially when compared with his belligerent remarks on the Senate floor just before he went to the White House on Monday afternoon.

“A little later today, I’ll sit down with President Obama to discuss his request to raise the nation’s debt ceiling,” he said brusquely. “And when I do, I intend to make a request of my own: I intend to ask the President what he’s prepared to do, outside of raising taxes, about the massive deficits and debt that have accumulated on his watch. I will tell him what Republicans are looking for in this debate: to cut spending now, cap runaway spending in the future, save our entitlements from bankruptcy, and to get our economy moving.”

Of course, McConnell is a pork-chopping politician of the old school, who has long since developed the bad habit of using taxpayer funds to glorify himself over many years. There are at least as many federal, state and local projects in Kentucky named after him as there are in New York bearing the name of Rep. Charles Rangel – in fact, there is even a Mitch McConnell “leadership institute” at the University of Louisville much like the City University center that got Rangel in so much trouble. The notion that he is now a protector of the public purse is amusing indeed.

But now McConnell’s office put out no statement after his encounter with Obama, which is encouraging not just because he isn’t saying anything – but because he must now keep quiet if the Republicans are finally going to make a deal.

It was always hard to imagine that McConnell — as faithful a servant of big business and big finance as exists in Washington – would permit the kind of economic disruption that would ensue if the United States Treasury failed to fulfill its obligations. He pretends to agree with the craziness and brinksmanship that has seized his party, but like John Boehner, the Speaker of the House neutered by his own Tea Party faction, McConnell knows that a deal must be done.

As a Senator whose service goes back to the Clinton and Reagan eras, he also knows that tax increases don’t necessarily damage the economy. He was among the minority when the Clinton tax increases passed on a strictly partisan vote, in the spring of 1993, amid Republican warnings of an economic disaster. What followed, as McConnell and his colleagues now seem unable to remember, were not only an unprecedented period of growth but the first balanced federal budget in three decades. Rather than constantly pandering to McConnell’s phony pleas for thrift, Obama should remind him just how ridiculously wrong the Republicans were back then.