America May Be on the Wrong Track, But Is Paul Ryan's the Right One?

America May Be on the Wrong Track, But Is Paul Ryan's the Right One?

... [S]adly for today's GOP, they have more than a few [bad ideas].

Take
Paul Ryan's budget plan, for instance.

...

Ryan runs into serious problems when he starts suggesting ways to make the tax code simpler. In particular, his emphasis on rate reduction and bracket consolidation is misconceived.

To begin with, "flatter" doesn't mean "simpler." Even people filling out their tax returns by hand can use the tax tables in the back of the book to avoid all the complicated math.

But the real problem is distributional. Radically flattening and lowering individual tax rates would give rich taxpayers a nice fat windfall. But for most of us, it wouldn't do much. And for a few, the Ryan cuts would deliver precisely nothing.

According to
estimates released today (March 15, 2013) by the Tax Policy Center, the Ryan tax reforms would provide an average tax cut of $3,000 to American households. How awesome is that?

Well, not so awesome, at least if you're living the life of an average household. Americans making more than $3.3 million a year would see a tax cut of $1.2 million. As Howard Gleckman
points out on TaxVox, that represents a 20 percent increase in their after-tax income.

But for people in the middle of the income spectrum, the extra cash would come to just $900. For those in the bottom quintile, it would be just $40. And for a third of the taxpayers in the bottom group, the Ryan reforms would provide no relief at all.

...

View Joseph Thorndike's opiniion in its entirety on the taxanalysts® Blog.

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