The fallout from Paul Ryan’s hand waving on specifics for the tax package he and Mitt Romney are running on continues. A woman at a town hall event in Iowa pressed him for specifics, and Ryan again basically demurred. He said how hard it would be to deliver the math in the confines of a broadcast television format, then spent 5 minutes or so offering the woman no specifics on what precise tax expenditures he and Romney would be willing to eliminate to reach the goal of reducing tax rates by 20% while not lowering the tax burden on the rich and not collecting any less in total revenue.
Ryan had a much longer interview with Bloomberg TV today, and in that longer format, he got a bit more specific, but didn’t identify which tax expenditures would get bulldozed to pay for the cut in rates. He just asserted that the tax expenditures eliminated would fall mostly on the rich. However, when asked whether one specific loophole focused entirely on the rich would go – that would be the carried interest loophole, which allows fund managers to pretend that their income is actually a capital gain, taking advantage of the 15% tax rate rather than 35% – Ryan wouldn’t say.
Finally, Ryan defended the lack of specifics by saying “You don’t say to Congress, to Democrats you want to work with, take it or leave it, it’s all my way or the highway,” while still demanding a 20% across-the-board cut in individual tax rates.
There’s a very good reason that Ryan won’t get specific on his ticket’s tax plan. It’s not just because identifying the elimination of tax breaks would be unpopular. It’s because it’s mathematically impossible.
You cannot lower tax rates as much as Mr. Romney and Mr. Ryan propose to do and keep all the existing tax expenditures for middle class Americans and still end up with the same total amount of tax revenue.
As the Tax Policy Center demonstrated, cutting individual income tax rates by 20 percent from today’s levels would reduce tax burdens by $251 billion per year (in 2015) among households with income above $200,000.
If you leave preferential tax rates for savings and investing (e.g., long-term capital gains and dividends) untouched, as Mr. Romney has said he would do, that leaves only $165 billion of available tax expenditures that can be eliminated from this same group of high-income earners once their marginal tax rates fall.
That means there’s an $86 billion shortfall — the difference between $251 billion in tax cuts and $165 billion in potential tax increases on this high-income group — that needs to be accounted for somewhere.
By process of elimination that somewhere must be the rest of the population, the 95 percent of households earning less than about $200,000 annually.
That didn’t take very long at all to explain. But getting out of that box would not just take long, it would require healthy dollops of bullshit. So Ryan demurs.
Surely he would answer this by saying that the author is being unfair by not “dynamically scoring” or accounting for economic growth to raise revenue. Fine, then, show us that model so we can assess it. But in the absence of an alternative, we’ll just have to go with the “no specifics because it’s mathematically impossible” explanation.





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How many dollops to a boatload?
In a related story, there is a videotape now online in which Ryan makes the claim that 30% of Americans want a welfare state. There is no basis for that claim other than Ryan’s imagination.
Ryan also cites statistics from some organization that claims that 20% of Americans receive at least 75% of their incomes from the federal government, and another 20% get at least 40% from the federal government. Well, I did some research. There are about 194-million Americans aged 18 or older. Of those, 39.5 million (20%) are age 65 or older. Twelve million Americans are federal employees (including military). That’s another 6%. So 14% of American adults are not in either of those two groups and receive at least 40% of their incomes from the federal government. I don’t know what percentage are federal government contractors.
Now, what I would like to know is what the percentages were in 2000, the last year of the Clinton presidency, when a higher percentage of Americans were middle class and only 11% were in poverty, compared to 16% now, thanks mainly to the Great Recession.
Lyin Ryan.
Bullshit is his middle name.
Dick
what second stringer is going to moderate the VP debate
Some wingnut posted a comment to the NY Times article you’ve linked to. He had a link to an article from some website that the American Enterprise Institute has. And the wingnut said that based on the findings of the article, the Tax Policy Center had revised their analysis. He ended with a snarky remark that the author wasn’t interested in reporting, just on repeating Obama talking points.
So I went over and looked at the article. And, it was true; the Tax Policy Center did them the courtesy of rerunning their analysis using the assumption that a large dollar amount of “tax expenditures” would be eliminated that they had not used their first analysis.
What made up the biggest part of those “tax expenditures” that would be eliminated?
The interest on Municipal bonds would no longer be tax free.
Hahahahahahahahahahah
I returned to the NYT comments and set everyone straight.
Oh yeah, though they didn’t put a dollar amount on it the AEI article also whined about the Tax Policy Center not using “dynamic scoring”.
Let me hazard some guesses on what loopholes Romney and Ryan plan on eliminating in return for a 20% reduction in rates: the tax deduction for mortgage interest, the standard deductions for filers and dependent children.
Don’t forget the biggest one of all
Making you pay taxes on what your employer pays for your health insurance.