"The Ryan Budget's Radical Priorities
Provides Largest Tax Cuts in History for Wealthy, Raises Middle Class Taxes, Ends Guaranteed Medicare, Privatizes Social Security, Erodes Health Care"
"[Paul Ryan's]...'Roadmap' would give the most affluent households a new round of very large, costly tax cuts by reducing income tax rates on high-income households; eliminating income taxes on capital gains, dividends, and interest; and abolishing the corporate income tax, the estate tax, and the alternative minimum tax. At the same time, the Ryan plan would raise taxes for most middle-income families, privatize a substantial portion of Social Security, eliminate the tax exclusion for employer-sponsored health insurance, end traditional Medicare and most of Medicaid, and terminate the Children’s Health Insurance Program. The plan would replace these health programs with a system of vouchers whose value would erode over time and thus would purchase health insurance that would cover fewer health care services as the years went by.
The tax cuts for those at the very top would be of historic proportions. A new analysis by the Urban Institute-Brookings Institution Tax Policy Center (TPC) finds:
■The Ryan plan would cut in half the taxes of the richest 1 percent of Americans — those with incomes exceeding $633,000 (in 2009 dollars) in 2014.
■The higher one goes up the income scale, the more massive the tax cuts would be. Households with incomes of more than $1 million would receive an average annual tax cut of $502,000.
■The richest one-tenth of 1 percent of Americans — those whose incomes exceed $2.9 million a year — would receive an average tax cut of $1.7 million a year. These tax cuts would be on top of those that high-income households would get from making the Bush tax cuts, which are due to expire at the end of 2010, permanent.
To offset some of the cost of these massive tax cuts, the Ryan plan would place a new consumption tax on most goods and services, a measure that would increase taxes on most low- and middle-income families. TPC finds that:
■About three-quarters of Americans — those with incomes between $20,000 and $200,000 — would face tax increases. For example, households with incomes between $50,000 and $75,000 would face an average tax increase of $900. (These estimated changes in taxes are relative to the taxes that would be paid under a continuation of current policy — i.e., what tax liabilities would be if the President and Congress make permanent the expiring 2001 and 2003 tax cuts and relief from the alternative minimum tax.)
■The plan would shift tax burdens so substantially from the wealthy to the middle class that people with incomes over $1 million would face much lower effective tax rates than middle-income families would. That is, they would pay much smaller percentages of their income in federal taxes.
Because of the Ryan plan’s enormous tax cuts for the affluent, even the very large benefit cuts that the plan would make in Medicare, Medicaid, and Social Security — and the plan’s middle-class tax increases — would not put the federal budget on a sustainable course for decades. The federal debt would soar to about 175 percent of the gross domestic product (GDP) by 2050. In contrast, most fiscal policy analysts recommend that the debt-to-GDP ratio be stabilized within the next ten years, and at a far lower level.
Reports of Plan’s Fiscal Soundness Rest on Misunderstanding of CBO Analysis
Assertions that the Ryan plan is fiscally responsible rest on a serious misunderstanding of a Congressional Budget Office (CBO) analysis of the plan. CBO only partially analyzed the Ryan plan. Contrary to some media reports, CBO has not prepared an actual cost estimate of it.  CBO generally does not produce estimates of the effects of proposed changes in tax policies; that is the responsibility of the Joint Committee on Taxation. In its analysis of the Ryan plan, CBO did not attempt to measure the revenue losses that Rep. Ryan’s proposals would generate.
Instead, as its report states, CBO simply used an assumption specified by Rep. Ryan’s staff that the overall level of revenues would remain unchanged from what the federal government would collect through 2030 under current policies, and would equal 19 percent of GDP in later years. CBO did not find that the Ryan plan actually would achieve these assumed revenue levels."
CONTINUE READING HERE.
David Frum isn't a fan of Paul Ryan's budget:
"The real message of the Ryan plan is: Upper-income tax cuts now; spending cuts for the poor now; more deficits now; spending cuts for middle-income people much later; spending cuts for today’s elderly, never.
Jobs first, deficit later is actually the right timing of priorities. But the upper-income tax cuts of 2001 and 2003 markedly failed to translate into higher incomes for ordinary Americans. The Ryan plan offers no reason to hope that another round of the same medicine will deliver better results."
Others who have looked at Ryan's plan say this:
"Look, I am all for reducing the deficit, massively reducing the deficit. But when these Republicans come up with cut, cut, cut, cut yet not only no tax increases but tax cuts, I find them wanting. It seems their goal is to shrink the deficits with spending cuts, blow it back up with tax cuts, rinse, repeat. When Paul Ryan proposes a plan that matches his spending cuts dollar for dollar with tax increases, then I will call him courageous. Until then, sorry, I just cannot take him seriously.
It would also be possible to come up with a plan that has $2 of cuts for every $1 of tax hikes - which is not far off what the Coalition government in Britain has done.
The reason I am glad that Ryan has put out his report is that it honestly reveals the sheer scale of the problem, and cannot hide the fact that it will hurt seniors, the poor, and the middle class. For so long now, no Republican has fessed up to the pain involved in balancing the budget. Whatever its flaws, the Ryan plan shifts the debate to more realistic grounds, which is a success in and of itself. Another writes:
Like you, I had an initially positive reaction to the Ryan plan, but as I read more and more, the only positive I take away is that someone had the courage to propose a plan that is easy to 'death panel'. So kudos for showing the courage, but I think his plan falls apart in the details and the assumptions."