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Paul Ryan’s Truthiness

March 28, 2012

Paul Ryan - he's the 'serious' onePaul Ryan is spinning a tale of a budget balanced through fairness to all. For those who may not know any better, it sounds all together reasonable:

[W]e’re saying get rid of all the special interest loopholes and tax shelters that are disproportionately used by those higher income earners, get rid of those tax shelters, so you can lower tax rates for everybody, and make us better wired for economic growth and job creation.

Could this be true? Is the budget guru of the GOP actually proposing to end our tax system’s favoritism for the rich? Closing loopholes? Everyone hates loopholes (aka ‘tax expenditures’) – so this is starting to sound pretty good. Ryan contends that most of the benefit of these tax expenditures go to the very rich, anyway. He even has the chart to prove it.

Who Benefits From Tax Loopholes

Wow, huh? We could ditch these tax breaks and it would really only effect the people at  the top, who can afford it anyway? Not so fast.

The problem is that the chart doesn’t actually show what Ryan says it shows. Look carefully: this is the per person value of these benefits, not the disbursement of  benefits by income. Also keep in mind that the 1% is an exceedingly small portion of the population. The remaining 99% receives a much larger share of these benefits than the chart above would seem to imply (at least Ryan’s interpretation of it.)

In other words, Ryan wants to sell us on a plan to eliminate these tax expenditures, and he’s trying to use the 99%’s anger with the 1% to do so. Unfortunately, this would have a far greater impact on the 99%’s tax burden than it would that of the 1%.

To make matters worse, this chart includes all tax expenditures – from the mortgage interest deduction to capital gains. Now here’s the really evil part: Ryan’s plan does not call for raising the rate on capital gains and dividend taxes. (The two ‘loopholes’ which flow overwhelmingly to the very rich. “Fully 75 percent of the benefits of that tax expenditure flow to the top 1 percent of people.” (CBPP))

So Paul Ryan wants voters to believe that the House GOP budget plan is a model of fairness, while he’s actually planning to protect the tax breaks which most benefit the 1%. Sneaky, eh?

The Center For Budget and Policy Priorities has put together one more chart you should see.

Curbing Loopholes Would Effect All Americans

I know this stuff can be a bit dry, but what this shows is the effect of closing all the loopholes except capital gains and taxes on dividends. (Because, remember, Ryan doesn’t plan to touch those.) What we see, unlike the first chart, is that all income groups would, in fact, be effected by these changes. It’s just that those at the very top would still be hanging on to a few goodies.

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2 Comments leave one →
  1. March 28, 2012 11:57 am

    RRrrrrrrrrrrr!!!!!! Paul Ryan is so evil! I hope I never see him in person because I don’t think I could keep myself from kicking him in the balls.

Trackbacks

  1. Paul Ryan: Budgeting For the 1% « The Cassandra Files

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