March 14, 2013

Tax Changes in the Ryan Budget Plan

We’ve already explained why the Ryan Budget would represent a major burden to everyday Americans while providing tax relief to the richest 2% and top corporations. But a deeper look into the numbers shows how unfair and irrational the tax provisions in the Ryan Budget are.

First off, the Center on Budget and Policy priorities shows that the Ryan Budget will give millionaires a tax break of $200,000 or more:

For taxpayers with income exceeding $1 million, the benefit of Ryan’s tax rate reductions and other proposed tax cuts would far exceed the loss of any tax expenditures. In fact, under Ryan’s plan taxpayers with income exceeding $1 million in 2014 would receive an average net tax decrease of over $200,000 that year even if they had to give up all of their tax expenditures. These taxpayers would see an even larger net tax decrease if Congress failed to limit or eliminate enough tax expenditures to offset the costs of the proposed tax cuts.

CBPP goes on to explain that the loss of revenue from higher-income taxpayers will result in those less fortunate paying more:

Additionally, since higher-income taxpayers will effectively receive a tax cut under the budget, “the average net impact of Ryan’s plan on some taxpayers at lower income levels would necessarily be a tax increase in order to fulfill Ryan’s goal of colleting the same amount of revenue as expected under current law.”

The Budget also calls for a reduction of the corporate tax rate to 25%, and changes the individual income tax system to one with only two rates. This plan makes the tax code less fair and makes middle-class Americans sacrifice too much.

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