Thursday, February 11, 2010

More on Paul Ryan's Republican "Roadmap for America's Future"

So, a few days ago I mentioned the "shadow budget" Republican Representative Paul Ryan has crafted, which basically puts Social Security and Medicare on death row.

Christina Bellantoni of Talking Points Memo has done an in-depth analysis of that budget outline, and here's what she's found so far:

* Abolition of the capital gains tax.

* Abolition of the estate tax.

* Abolition of the corporate income tax.

* Abolition of income tax for income derived from interest on bank deposits and investments.

* Abolition of the top three income tax brackets, leaving a maximum 25% tax on households making $50,000 or higher, 10% on people making less, with a larger standardized deduction.

* Creation of a new national 8.5% sales tax, with absolutely no type of merchandise exempted- food, medicine, printed matter all included.

* And, if you've forgotten, privatization of Social Security and the replacement of Medicare with vouchers to buy private corporate-run insurance.

Two lines Talking Points Memo quotes from the original document are astonishing in their bare-faced chutzpah:

"Lower {tax} rates reduce disincentives to work and increase earnings," the roadmap proclaims.

Ryan writes in the roadmap the changes are to keep the federal tax burden at its current level.

First, lower tax rates reduce disincentives on the rich to "increase earnings"- that is, to take as much as they can grab and leave nothing for anyone else. Why on Earth do the immensely rich, or even the comfortably-well-off, need incentives to make MORE money? And why, above all, do we want corporations to make as much money as possible- and pay taxes on absolutely none of it?

Consider: under the Republican plan, corporations pay no taxes. People who earn money buying and selling corporate stock pay no taxes, because that's capital gains. People who earn dividends from preferred stock pay no taxes. The only taxes levied under this plan are on wages- the wages of the working middle-class and the poor, not the rich- and on the necessities of life, which everyone must buy but not everyone can afford.

This plan is, put bluntly, a Republican ploy to ensure that "only the little people pay taxes." This is trickle-down economics at its most extreme- and brazen.

On to the second item: "keeping the tax burden at its current level." This is, put bluntly, bullshit- but, for the Republicans to claim that it will balance the budget, it's necessary bullshit. The Republicans somehow got a fig-leaf letter from the Congressional Budget Office which says:

The Roadmap, in the form that CBO analyzed, would result in less federal spending for Medicare and Medicaid as well as lower tax revenues . . . Federal spending for Social Security would be slightly higher than under CBO’s alternative fiscal scenario for much of the projection period, but the system would become sustainable as revenues increase and traditional benefits decline. The budget deficit would peak at 5 percent of GDP in 2034 and then decline. By 2080, the Roadmap would generate a budget surplus of about 5 percent of GDP. . . . debt is projected to peak at 100 percent of GDP in 2043 and to decline thereafter, reaching zero by 2080.

So, best case scenario: deficit spending continues for twenty years, and doesn't end until every last one of you reading this is long dead.

Except, as TPM's Brian Beutler reports, Ryan ordered the Congressional Budget Office to cook the books for this analysis:

For their analysis Ryan provided CBO with a remarkable assumption: he asked CBO actuaries to assume that the major tax cuts he calls for won't create any change in federal revenue over the next two decades--at all.

Here's how they put it, in budget-ese: "As specified by your staff, for this analysis total federal tax revenues are assumed to equal those under [current fiscal policy]," the analysis reads.

. . .

In 2008, the Tax Policy Center analyzed a similar GOP plan and determined it amounted to the biggest tax cut in history.

Whether Ryan was knowingly engaging in sleight-of-hand, or whether he was using an inaccurate supply side model to correlate tax cuts with increased revenue is unclear. But what is clear is that if CBO had based its analysis on an official accounting of the ways in which his proposed policy changes would impact revenue, they would have come to a different conclusion.

So, in short, the Republican plan is the bunk. And that's being kind to it.

Now, I would prefer a flat income tax with a very high individual deductible and no complex credits or exemptions, myself. I would prefer that estate taxes apply only to liquid assets- money, bonds, and stocks. And I'd prefer a sales tax or value added tax to income taxes as a whole- provided certain necessities are exempted and/or the poor get a rebate or "pre-bate" to make up for what they can't afford.

But this package? It's bullshit. Outrageous bullshit. This is the wealthiest among us, the corporations and the mega-wealthy, trying to evade taxes altogether- and put the burden on the rest of us- while throwing the poor and needy out on the street to root, hog, or die.

And yes, it might seem like the Republicans are backing away- after all, even the author of the "Roadmap" says it's "very different from an actual budget"...

... but don't be fooled. This is the same man who calls Social Security and Medicare "collectivist."

"We have an opportunity to make a choice clearly once and for all in the next two elections, and we owe it to the American people to give them a clear choice: Do you want a collectivist welfare state or do you want to get back to being a free market? We need to make a moral, not just practical or statistical, case," he told Reason, a libertarian magazine, in December.

. . .

And despite GOP attempts to frame these entitlement reforms as something other than privatization, Ryan has been clear on the point.

"Rather than depending on government for your retirement and health security, I propose to empower people to become much more self-dependent for such things in life," he said in a speech to the Hudson Institute last June.

Or, put bluntly, you're on your own- and that's how it ought to be. Let the poor and unlucky die.

This is the Republican Party, plain and simple: more wealth and power for the rich and powerful, and nothing for anyone who can't pay for it themselves.

EDIT: Apparently Democrats are hammering Republicans on the "Roadmap"- and a few, including Arizona Rep. John Boozeman and Georgia Rep. Jack Kingston, are defending it.

Boozeman: "Congressman Ryan is working to cut the deficit spending and I appreciate his commitment to putting our country on the road to fiscal responsibility. His proposal may not be perfect, but I think he is making a thoughtful and serious effort to prevent Congress from driving our country into financial ruin."

Kingston: "We need to go in, and we need to cut duplicate programs, programs that are inefficient, programs that are expanding the entitlement mentality. I think we should go back to Social Security, take it off budget, dedicate the funds, put personalized accounts on it. On Medicare, I think something like vouchers, where people actually have an incentive to save money for the government, and they're rewarded for doing so."

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