On Tuesday, House Speaker Paul Ryan delivered a “major speech” on taxes to the National Association of Manufacturers. Below we’ve annotated excerpts of Ryan’s speech with what he was REALLY thinking
What Ryan Said: “Ladies and gentlemen, we are going to fix this nation’s tax code once and for all.”
What Ryan Meant: We are going to put the fix in once and for all for millionaires, billionaires and big corporations.
What Ryan Said: “President Trump recently introduced a set of principles for tax reform, and right now we — the House and Senate — are working with the administration to turn them into a transformational tax reform plan. Chairman Kevin Brady and our Ways and Means Committee members are holding open hearings and meeting with stakeholders on this right now.”
What Ryan Meant: President Trump recently handed out a one-page flyer with 4 bullet points and 24-point font, and called it a set of principles, so that’s what we’re calling it. Those principles are to: cut taxes for rich people, cut taxes for corporations, cut taxes for even richer people, cut taxes for even richer corporations. We’re gonna pay for it by cutting Medicaid, Social Security, and basically everything else. Except Defense!
What Ryan Said: “I want to take a few minutes to walk you through what that kind of reform will look like.”
What Ryan Meant: I want to take a few minutes to try to disguise our $3 trillion tax giveaway to the wealthy and big corporations as tax reform.
What Ryan Said: “Let’s start with families and individuals.”
What Ryan Meant: Let’s start, as usual, with millionaires and big corporations.
What Ryan Said: “First, we will eliminate harmful, burdensome taxes including the death tax and Alternative Minimum Tax.”
What Ryan Meant: First, we will give huge tax breaks to the inheritors of massive fortunes and to wealthy people who exploit excessive deductions and credits. By eliminating the estate tax, we hand the privileged heirs of the richest one in 500 families — estates worth at least $5.5 million — $174 billion over 10 years. By axing the Alternative Minimum Tax, we enable gaming of the system by sophisticated tax dodgers, losing over $400 billion over a decade. President Trump and his family, by the way, would come out millions if not billions of dollars ahead, but who’s counting?
What Ryan Said: “And finally — and most importantly — we will use the savings from eliminating these loopholes to lower tax rates.”
What Ryan Meant: And finally — and most importantly — we will use the savings from eliminating these loopholes to lower tax rates primarily for millionaires and big corporations. Don’t worry, 99% of the tax breaks under our plan go to the top 1% by year 10. That’s a nifty $213,000 tax cut each year, which they deserve.
What Ryan Said: “That is what this is all about: jobs, jobs, jobs. Good, high-paying jobs.”
What Ryan Meant: That is what this is all about: tax cuts for millionaires, tax cuts for billionaires, tax cuts for wealthy corporations that already dodge paying their fair share. Economists have already proven that lowering taxes on the wealthy and corporations doesn’t necessarily create jobs or grow the economy, but this is the only argument we have that might let us pull a fast one over on the public so we’re gonna stick with it.
What Ryan Said: “Most people do not realize this, but here in America, 8 out of 10 businesses file their taxes as individuals. In fact, most of our jobs come from these new and small businesses. And under our crazy system, successful small businesses pay a top marginal tax rate of 44.6 percent.”
What Ryan Meant: I’m implying that mom-and-pop, Main Street small businesses pay this much, but in fact only 2% of the richest so-called “pass through” businesses pay at that top rate — like hedge funds, big law firms and real-estate firms such as the Trump Organization. Believe me: our “small business” tax cuts will be great for millionaires!
What Ryan Said: “At the same time, our corporate tax rate — for the rest of American companies — is 35 percent.”
What Ryan Meant: We all know that almost nobody actually pays that because of all the loopholes! I’ll conveniently ignore those pesky accountants at the Government Accountability Office who determined profitable U.S. firms paid on average only a 14% effective tax ratebetween 2008 and 2012. The Institute on Taxation and Economic Policy reported that profitable Fortune 500 companies paid just a 21.2% federal corporate income tax rate over the eight-year period 2008–15.
What Ryan Said: “How can we compete like that? We can’t.”
What Ryan Meant: I’ll ignore here that U.S. corporations are already enjoying near record profits and near record lows in the federal income taxes they pay since the 1960s. I should probably also not mention that direct foreign investment flowing into the U.S. economy hit an all-time high of $396 billion in 2016. Or that the U.S. economy ranks third in global competitiveness out of 138 countries.
What Ryan Said: “Part of this is moving to what we call a territorial system that reverses this trend of corporate inversions, and enables businesses to bring back cash stranded overseas without being taxed.”
What Ryan Meant: What makes a territorial tax system so great is that it allows companies to avoid paying taxes on foreign profits entirely! And multinationals will have even more incentive to shift even more profits and jobs offshore than they do now! It would also lose $205 billion over 10 years, but think about how much more money CEOs and rich shareholders can keep!
What Ryan Said: “Right now, if an American company makes money overseas, it gets taxed over there. But we also tax it again if the company tries to bring that money back to the U.S. Almost no other country does this.”
What Ryan Means: Well, a lot of the money is actually in tax havens, and we give dollar-for-dollar credits on any foreign taxes paid, but who needs details, am I right? Other countries tax corporations in other ways, like through hefty value-added taxes, but we don’t need to get into that right now America!
What Ryan Said: “And as a result, it is preventing many companies from bringing that money home. They just keep it over there. It is literally stranding trillions of dollars that could come into our economy. We have to fix this. And we will.”
What Ryan Meant: Well actually a special tax loophole called “deferral” encourages corporations to keep their profits offshore, and the CEOs who give me campaign money don’t want that closed. Almost 300 Fortune 500 companies owe $760 billion in U.S. taxes on the $2.6 TRILLION in profits they have stashed offshore. (Just 10 companies have 40% of the untaxed offshore profits.) Why shouldn’t the CEOs and shareholders get to keep all that cold hard cash?
What Ryan Said: “Help us build the confident America that our children deserve.”
What Ryan Meant: I mean, help us build the confident America that our RICH children deserve. To pay for these huge tax cuts we need to slash Medicaid, Social Security, education, food stamps and a lot more — but rich people don’t need those services anyway.
What Ryan Said: “Thank you.”
What Ryan Meant: You’re welcome, gazillionaires.
This post originally appeared on Medium.