Republican Tax Plan

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Republican Tax Plan
Posted by David Fairthorne on Wed Apr 6 16:00:53 2011 edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d Source: http://www.nationalpost.com/opinion/Republican+plan+makes+sense/4565713/story.html Republican tax plan makes sense Chris Edwards, Financial Post · Apr. 6, 2011 \| Last Updated: Apr. 6, 2011 4:28 AM ET House of Representatives Budget chairman Paul Ryan released a blueprint yesterday to guide Republican fiscal policies for years to come. Ryan's budget proposes spending cuts, tax reforms and the restructuring of entitlement programs. His plan will dominate budget discussions for the rest of the year, and it will help frame the fiscal debate for the 2012 presidential campaign. That's why liberal pundits are already attacking it with gusto. In The Washington Post, E. J. Dionne called Ryan's plan "radical," "irresponsible," and "extreme." But serious fiscal experts know the real extreme plan is U.S. President Obama's "do nothing" budget, which would result in disastrous levels of debt and crushing tax burdens on families in coming years. Ryan's main focus is on transforming the so-called entitlements. He would transition Medicare from the current Soviet-style system to one based on consumer choice. Instead of a system based on payments to healthcare providers, new retirees would receive a "premium support" payment to buy a private insurance plan of their own choosing. For Medicaid, food stamps and other federal-state aid programs, the Ryan plan embraces block grants. The states would receive a fixed pot of money, but be given more flexibility on program design. That would end incentives for states to over-expand their programs with "free" federal dollars. Block granting was the successful approach of welfare reform in 1996, and it should be warmly received by today's large group of conservative governors. Over the first decade, Ryan's reforms would reduce federal spending from 25% of gross domestic product to about 20%, although that level would still be higher than it was as recently as 2007. The big savings would come over the longer term. By 2040, the size of the federal government under Ryan's plan would be half the size under a "do nothing" plan -roughly 20% of GDP vs. 40%. For young Americans, the resulting differences in tax burdens and prosperity between those alternative fiscal futures would be massive. On taxes, Ryan would reduce rates and simplify the system by dropping the top individual income tax rate to 25%. E. J. Dionne also attacked Ryan's plan as "tax cuts for the rich," but that's nonsense. It's easy to design a two-rate tax system that doesn't change the current distribution of tax payments at all. Ryan would cut the federal corporate-tax rate to 25% from 35%, a higher rate than the average in Europe but a major spur to investment and job creation. In sum, Paul Ryan has proposed a fiscal reform structure that should win broad political support. Moderates can take comfort that the premium support idea for Medicare reform is endorsed by prominent Democratic economist, Alice Rivlin. Fiscal conservatives can take comfort that the Ryan plan is a step toward even larger spending and tax reforms. Block granting, for example, can be a step toward fully devolving programs such as food stamps to the states, and the Ryan tax plan can be a first step toward a flat tax. - Chris Edwards is editor of the Cato Institute's DownsizingGovern ment.org.
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Re: Republican Tax Plan
Posted by Newkirk Plaza David* on Wed Apr 6 16:18:14 2011, in response to Republican Tax Plan, posted by David Fairthorne on Wed Apr 6 16:00:53 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d Of course this article is brought to you by the right-wing friendly Cato Institute. I love it when the wealthiest 1 percent get the biggest tax cuts.
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Re: Republican Tax Plan
Posted by ClearAspect* on Wed Apr 6 17:19:18 2011, in response to Republican Tax Plan, posted by David Fairthorne on Wed Apr 6 16:00:53 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d I support it, if we can get changes done that over 10 years cuts spending overall by 6 trillion dollars thats a major step forward towards fiscal responsibility and lowering the debt.
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Re: Republican Tax Plan
Posted by SMAZ* on Wed Apr 6 22:51:33 2011, in response to Republican Tax Plan, posted by David Fairthorne on Wed Apr 6 16:00:53 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d Yeah, raising taxes on the middle class by eliminating deductions and credits so that the top rate can be lowered. Wonderful. A real winner. Paul Ryan will not survive the 2012 election. Stick a fork in him.
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Re: Republican Tax Plan
Posted by SMAZ* on Wed Apr 6 22:52:33 2011, in response to Re: Republican Tax Plan, posted by Newkirk Plaza David on Wed Apr 6 16:18:14 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d They get the ONLY tax cuts. By eliminating deductions and credits, everyone else gets their taxes hiked dramatically.
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Re: Republican Tax Plan
Posted by Charles G* on Thu Apr 7 07:07:33 2011, in response to Re: Republican Tax Plan, posted by SMAZ on Wed Apr 6 22:51:33 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d Paul Ryan will not survive the 2012 election It is a mistake to kill the messenger. Anyone who takes a sober look at the state of the budget will reach the same basic conclusion -- spending cannot escalate at the current rate and likely needs to be sharply reduced in the near term. Ryan is the first person to put anything on the table that recognizes this fact. The details of how to achieve this can and will be argued day and night but the basic premise is pretty much indisputable. The hardest part of any plan is the first draft. If we get the debt situation straightened out, you will owe a debt of gratitude to Ryan -- even if the final solution looks nothing like he has outlined.
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Re: Republican Tax Plan
Posted by SMAZ* on Thu Apr 7 07:27:52 2011, in response to Re: Republican Tax Plan, posted by Charles G on Thu Apr 7 07:07:33 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d It is a mistake to kill the messenger. Anyone who takes a sober look at the state of the budget will reach the same basic conclusion -- spending cannot escalate at the current rate and likely needs to be sharply reduced in the near term. So why does he have the top marginal tax rate drop from 35% to 25% while raising them on the middle class? Why does his plan still have a $400 billion deficit in 2021? Why does he hand over Medicare to for-profit private insurance companies while still pretending to save money? Didn't Medicare Advantage show that such schemes cost more? Why does he eliminate the savings from Obamacare? Why does he cut spending from homeland security, immigration enforcement, law enforcement, infrastructure and education and still expect the economy to grow? Why are farm subsidies and other corporate welfare not only left untouched but actually increased? Why does he base his plan's revenue and expenditure estimate on a 2.3% unemployment in 2021?
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Re: Republican Tax Plan
Posted by Charles G* on Thu Apr 7 07:38:02 2011, in response to Re: Republican Tax Plan, posted by SMAZ on Thu Apr 7 07:27:52 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d So why does he have the top marginal tax rate drop from 35% to 25% while raising them on the middle class? These will not be the final tax rates. Why does his plan still have a $400 billion deficit in 2021? Feel free to propose more spending cuts. etc. etc. etc. If you, or anyone else, has a credible plan to even make a dent in the deficit/debt problem feel free to present it. Our president -- as usual -- is absent on leadership as respects this issue.
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Re: Republican Tax Plan
Posted by Fred G* on Thu Apr 7 07:44:03 2011, in response to Re: Republican Tax Plan, posted by Charles G on Thu Apr 7 07:38:02 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d All Presidents are. your pal, Fred
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Re: Republican Tax Plan
Posted by AlM* on Thu Apr 7 08:19:19 2011, in response to Re: Republican Tax Plan, posted by Charles G on Thu Apr 7 07:07:33 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d spending cannot escalate at the current rate and likely needs to be sharply reduced in the near term. Correction. The gap between spending and income cannot escalate. The gap could perfectly well be closed purely by tax increases (not that I am suggesting that). We had nice prosperity under President Eisenhower with tax rates far higher than they are now.
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Re: Republican Tax Plan
Posted by Charles G* on Thu Apr 7 09:06:11 2011, in response to Re: Republican Tax Plan, posted by AlM on Thu Apr 7 08:19:19 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d Fair enough. You can play with both levers -- tax policy and spending changes. I actually don't think you could close the gap purely with tax increases. Based on the pure run-out of spending, the level of taxation required to close the gap would have too many negative follow-up impacts and would ultimately fall short (perhaps well short) of the target.
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Re: Republican Tax Plan
Posted by WillD* on Thu Apr 7 10:25:08 2011, in response to Re: Republican Tax Plan, posted by Charles G on Thu Apr 7 07:38:02 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d But this Republican tax plan is not credible because of it's selection of government spending items to cut. Every program targeted for spending reductions benefit urban and suburban groups who are more than likely Democratic voters. Balancing the budget on the backs of 90% of the population is a bad idea, but putting most of the burden on the 51% who are not even ideologically aligned to put the self interest of the richest 10% ahead of their own self interest is a recipe for a backlash. If these cuts were anything more than a partisan grab to pump pork into Republican areas while cutting anything with even the faintest smell of being a benefit to Democratic representative, then they might be taken seriously. But as itstands this plan is nothing more than fake austerity, a "you lose your stuff, I keep mine" plan created after the Democrats met their first offer. Being obstructionist is one thing, but this is simply greedy. With any luck the government will shut down and people will put the blame squarely on the Republican party and its attempt put even more of their spending on the backs of blue state taxpayers.
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Re: Republican Tax Plan
Posted by Charles G* on Thu Apr 7 10:58:50 2011, in response to Re: Republican Tax Plan, posted by WillD on Thu Apr 7 10:25:08 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d You can debate what to cut. What can't be debated is that something needs to be cut. I didn't see anything in your post that does anything other than perpetuate the status quo. Do you not see that as a recipe for failure?
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Re: Republican Tax Plan
Posted by Fred G* on Thu Apr 7 11:02:06 2011, in response to Re: Republican Tax Plan, posted by Charles G on Thu Apr 7 10:58:50 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d IMO it's going to need a little of this and a little of that, cut some of this, raise some tax on that. your pal, Fred
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Re: Republican Tax Plan
Posted by Newkirk Plaza David* on Thu Apr 7 11:15:59 2011, in response to Re: Republican Tax Plan, posted by Charles G on Thu Apr 7 10:58:50 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d A good plan shoud address the need to benefit families up to $300K a year the most, keep all deductions (and improve some like the $8,000 credit for first time buyers), make Medicare and Social Security more efficient without comprimising health care and disability/retirement benefits, clamp down on Medicaid, and make governmeent agencies more efficient.
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Re: Republican Tax Plan
Posted by Charles G* on Thu Apr 7 11:26:08 2011, in response to Re: Republican Tax Plan, posted by Newkirk Plaza David on Thu Apr 7 11:15:59 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d A good plan shoud address the need to benefit families up to $300K a year the most, keep all deductions (and improve some like the $8,000 credit for first time buyers), make Medicare and Social Security more efficient without comprimising health care and disability/retirement benefits, clamp down on Medicaid, and make governmeent agencies more efficient. Nice sound bites. I see you aren't serious about solving anything.
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Re: Republican Tax Plan
Posted by Charles G* on Thu Apr 7 11:27:19 2011, in response to Re: Republican Tax Plan, posted by Fred G on Thu Apr 7 11:02:06 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d IMO it's going to need a little of this and a little of that... Substitute "lot" for "little" and we're on the same page.
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Re: Republican Tax Plan
Posted by Charles G* on Thu Apr 7 11:30:16 2011, in response to Re: Republican Tax Plan, posted by Fred G on Thu Apr 7 07:44:03 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d Or, at least all Presidents have been absent on leadership as respects fiscal control. The best we have had in the past 30 years was Clinton -- and in many respects only because he was forced into it by an opposite party Congress.
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Re: Republican Tax Plan
Posted by Fred G* on Thu Apr 7 11:31:06 2011, in response to Re: Republican Tax Plan, posted by Charles G on Thu Apr 7 11:27:19 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d I like to start slowly but yeah. your pal, Fred
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Re: Republican Tax Plan
Posted by Fred G* on Thu Apr 7 11:32:07 2011, in response to Re: Republican Tax Plan, posted by Charles G on Thu Apr 7 11:30:16 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d Yeah, they made cuts and raised some taxes both and it worked. your pal, Fred
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Re: Republican Tax Plan
Posted by David Fairthorne* on Thu Apr 7 14:29:42 2011, in response to Re: Republican Tax Plan, posted by Charles G on Thu Apr 7 07:07:33 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d Anyone who takes a sober look at the state of the budget will reach the same basic conclusion -- spending cannot escalate at the current rate and likely needs to be sharply reduced in the near term. Either spending must be reduced or taxation must be increased, or some combination of the two. $6 trillion in the first ten years seems about the amount needed. Ryan is the first person to put anything on the table that recognizes this fact. Except for the bipartisan Simpson/Bowles commission, of which Paul Ryan was a member. Its co-chairs reported in November 2010. According to http://en.wikipedia.org/wiki/National_Commission_on_Fiscal_Responsibility_and_Reform: On November 10 Commission co-chairs Simpson and Bowles released a draft proposal for consideration by other commission members. The proposal presented five "steps." The first step was a $200 billion reduction in discretionary spending with proposed cuts including reducing defense procurement by 15% and closing one third of overseas bases, eliminating earmarks, and cutting the federal work force by 10%. The second step was $100 billion in increased tax revenues through various tax reform proposals, such as introducing a 15 cent per gallon gasoline tax and eliminating or restricting a variety of tax deductions such as the home mortgage interest deduction and the deduction for employer-provided healthcare benefits. The third step was controlling health care costs by maintaining the Medicare cost controls associated with the recent health care reform legislaton, in addition to considering a public option and a further increase in the authority of Independent Payment Advisory Board. The fourth step was a reduction in entitlements, including farm subsidies, civilian and military federal pensions and student loan subsidies. Finally, the fifth step was modifications to the Social Security program to raise the payroll tax and to increase the retirement age. The co-chairs also recommended some measures they felt would stimulate economic growth, such as a cut in the corporate tax rate from 35% to a more internationally competitive 26%. I prefer the bipartisan Simpson/Bowles proposal to the Republican Ryan plan, because the Ryan plan is biased in favor of the rich, for party political reasons. For more about the Ryan plan, see http://online.wsj.com/article/SB10001424052748703806304576242612172357504.html.
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Re: Republican Tax Plan
Posted by SMAZ* on Thu Apr 7 20:57:55 2011, in response to Re: Republican Tax Plan, posted by Charles G on Thu Apr 7 10:58:50 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d The main budget becomes mostly balanced the moment the economy turns to normal, the wars wind down and tax cut on the top 2% expires. Most of the deficit is driven by those three factors (that is extra spending because of high unemployment/poverty as in UI and food stamps, the wars, and tax cuts for the rich, depressed revenue because of a shaky economy). I would then start running large surpluses by freezing the discretionary budget (including defense but excluding education which is investment) for the next five years. It would only increase at half of inflation for the five years after that. Infrastructure needs would be met with a two penny a year increase in the gas and diesel tax for nine years. The tax increase on the rich would be a payroll tax instead of income tax. The money would help pay down the SS trust fund so that general borrowing would not be needed. The employer portion would start at $400,000 at 3.1% and frozen leaving a doughnut hole between %108,000 and $400,000 a year that would gradually close. The 28% income tax bracket would be reduced to 25% with the balance also going to SS. A commission to eliminate all unnecessary corporate welfare (in both spending and in the tax code) would be established in the same manner as BRAC. Medicare payroll tax would be imposed on all income. Medicare and Medicaid spending would also only rise at the level of inflation. To make it up to doctors, any doc or hospital, nursing home, etc who makes more than 60% of its revenue from public health programs could enter into a government run malpractice insurance program capping damages for malpractice. Medicare Part D would purchase drugs at the same prices as the VA. Farm subsidies would be eliminated except in emergencies and then as an insurance program, not an entitlement. Foreign aid would be curtailed. Defense spending would gradually return to 2003 levels as a % of GDP to make room for homeland security, VA, law enforcement and other priorities in the frozen discretionary budget. My above plan would be running record surpluses within five years if the economy has returned to normal by then.
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Re: Republican Tax Plan
Posted by David Fairthorne* on Thu Apr 7 22:17:29 2011, in response to Re: Republican Tax Plan, posted by SMAZ on Thu Apr 7 20:57:55 2011.* edf40wrjww2msgDetailOT:detailStr fiogf49gjkf0d The main budget becomes mostly balanced the moment the economy turns to normal, the wars wind down and tax cut on the top 2% expires. Most of the deficit is driven by those three factors (that is extra spending because of high unemployment/poverty as in UI and food stamps, the wars, and tax cuts for the rich, depressed revenue because of a shaky economy). The wars and the Bush tax cuts should end as soon as possible. The shaky economic recovery is perhaps reason enough to run a strictly temporary deficit. A commission to eliminate all unnecessary corporate welfare (in both spending and in the tax code) would be established in the same manner as BRAC. Strongly agree. I would like to abolish all subsidies and tax loopholes. You would also have to stop legislators from introducing new ones. My above plan would be running record surpluses within five years if the economy has returned to normal by then. Sounds good to me. I don't know whether you would really balance the budget by these particular measures, but these are the kinds of budgetary issues that Congress really ought to be debating. Instead they are deadlocked about "riders" ... longstanding social issues that have nothing to do with the budget.
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