Politics Daily's David Corn: A Same-Old GOP Budget: Rich Pay Less, Everyone Else Pays More

A Same-Old GOP Budget: Rich Pay Less, Everyone Else Pays More
by David Corn

This week Citizens for Tax Justice, a Washington-based advocacy group that focuses on tax policy, released a report analyzing how Ryan's master plan would affect taxes for Americans -- and compared it to Obama's budget proposals. These number-crunchers found that the top 1 percent -- people who make $460,700 or more a year -- would get a tax break of 15 percent and on average pay $211,300 less than under the Obama plan. Everyone in the top 10 percent ($127,769 and above) would receive a break. Those in the bottom 80 percent ($88,658 and below) would pay more taxes -- on average $1700 more. People making less than $20,063 would have to dole out $1605 in extra taxes.

These are pretty stark numbers. One reason low- and middle-income families would get socked by Ryan's plan is that he proposes replacing the corporate income tax with an 8.5 percent "business consumption tax" -- essentially a sales tax. Citizens for Tax Justice explains:

Low- and middle-income families spend most or all of their income on consumption, since they have little or no money left to save after paying for basic necessities. High-income families are able to save much more of their income. This means that if Congress enacts a tax that applies only to consumption (like a VAT or national sales tax), it would eat up a much larger percentage of total income for poor and middle-class families than for wealthy families. . . .

The 8.5 percent VAT is (almost) the entire reason why the bottom 90 percent of taxpayers would pay more under Congressman Ryan's plan than under President Obama's plan.

Ryan's plan has received attention mostly for getting rid of Medicare and Medicaid and pushing Social Security toward privatization. But now there's another case against it: It will squeeze more tax dollars out of low- and middle-income Americans to ease the burden on the wealthy.

Democrats ought to have a political field day with Ryan's plan during the 2010 campaign. It shows what the Republicans would like to do if they regain power: cut taxes on the wealthy, boost them for everyone else, while replacing Medicare and Medicaid with vouchers that will not cover the same amount of health care. Free-market health care for the elderly and poor, more regressive taxation -- all this sounds like a road map to the past.


http://www.politicsdaily.com/2010/03/10/a-same-old-gop-budget-rich-pay-less-everyone-else-pays-more/