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CBPP Analysis of Ryan Budget Tax Cuts

The big news last week was about the Supreme Court hearing oral arguments over the health care reform law, but the Ryan budget was a close second. In a year in which we’re facing potential taxmageddon [3], it’s just one of several tax proposals. Unlike the tax proposals floated by Presidential hopefuls, like Herman Cain’s 9-9-9 plans [4], this one comes from the Chairman of the House Budget Committee.

Rather than go through the proposal itself, let’s just take a look at the analysis [5] performed by the Center on Budget and Policy Priorities. As a bit of disclosure, Congressional Quarterly called them socially liberal and fiscally conservative.

The main points that the CBPP discovered were that the wealthy, those making more than $1,000,000, would receive significant decreases in their taxes on top of what they’d continue to get with the continuation of the Bush-era tax cuts (to be extended under the plan). Those making $50,000-$75,000 would receive about $1045 on average.

In addition, the plan on vaguely offers up ways to pay for these tax reductions. “Chairman Ryan claims that his budget would fully offset the cost of his proposed tax cuts by closing tax expenditures (tax credits, deductions, and other preferences) for high-income households. But his budget contains no specific proposals to do so, and meeting this goal would be all but impossible, given that the Ryan budget rules out reducing the tax expenditure most heavily tilted to high-income households: the preferential rates for capital gains and dividends.”

While this would never pass in its current form, I think it’s valuable to understand where each party hopes to go with respect to tax rates.