Paul Ryan: Two Rate Tax System For Two Americas

Rep. Paul Ryan has been making some publicity rounds lately with articles in the Beloit Daily News, including an interview with Peter Slen on C-Span just this past Wednesday.

Lately, the fast-talking Ryan seems to be increasingly used as a GOP point man for fiscal policy, but much like the Republican presidential field, he has been sending a message that the GOP has fallen from graces so to speak with their evil spending ways and in making that acknowledgement sends listeners an agreeable message that because he is aware of this, they (GOP leaders) can make corrections to restore the party back on some imaginable and righteous course. Make no mistake, the GOP over the past 40 years has maintained the same policies as always under the guise of conservatism, religion, smaller government, economic growth and less taxes. They are the phonies they always were, nothing has changed except for the confession that they are heading in the wrong direction while somehow someway the country under their recent guidance is headed in the right direction. Suuuuuure.

BDN Excerpt:
He noted that, according to the Congressional Budget Office, the bill would shift about 2 million children currently in private health care plans to government-run health care, and provide benefits to those making incomes of up to $83,000.

The $83,000 figure is debatable. It was originally the income cap designed for high cost-of-living states such as California and New York, but was eliminated by the Bush Administration as part of SCHIP. More importantly though, why would anyone be willing to selfishly hold up the health care of nearly 47 million people because 2 million may be pulled out of private insurance plans? Still, Ryan implies that middle-class families earning less than $83,000 are too wealthy to collect what amounts to a $5,000 tax credit towards health care. But…….. in very typical fashion, Ryan redirects the focus from SCHIP to the elimination of the Alternative Minimum Tax (AMT), a tax nearly equivalent to the SCHIP credit that he claims the middle-class are not wealthy enough to pay.

BDN Editorial Excerpt:
Ryan would repeal the AMT and pose a choice for taxpayers: Continue using the present tax system or opt instead to be part of a two-rate simplified reform plan, taxing all income at either 10 percent (up to $100,000 for joint filers) or 25 percent for income beyond that.

This is a trick bag. Ryan is not only playing election-year tax cut politics here, his anti-idea is only one step away from instituting a devastating flat tax.

In the simplest of terms, we are taxed by the income we earn on a sliding-bracket scale for the best and fairest of reasons. For instance, if the country produced $5 trillion in annual cash flows and you collected 2.5 trillion of it, you alone are in a bracket that collected 50% of all revenue. You would be required to pay 50% of the governments operating costs. It may be 20% percent of 2.5 trillion or it might be 80% percent, whatever the government requires. A flat tax ignores all of the complexities of the modern world and the income earner. Nothings perfect in the system today, but clearly, simplification of this order is purely idiotic. If you think there is a great divide between the rich and the poor now, you ain’t seen nothing till you see what a flat tax or sales-only tax would do. Either one would be devastating. This isn't rocket science.

But it is interesting that Ryan believes annual incomes of $100,000 or less deserve what appears to be a substantial tax cut, they do, although in his view not performing the additional duty of cutting health costs of a middle-class family as SCHIP would do. This sends a strong message that Ryan’s tax policy favors private sector profits at any costs, even your health.

It has been said that George W. Bush is the only president to enact a tax cut during wartime. Just as well, Rep. Ryan may be the modern exemplification of old school Republican politics, offering tax cuts during deficits.

In basic terms, the fiscal problem in Washington is the inability to exercise borrowing restraint. And Republicans - who turned years of well-placed tax cuts and pay-as-you-go surpluses into record deficits - are the guilty suspects.

Embrace borrowing control and pay-as-you-go, because it's the right thing to do. Set partisanship aside and work toward real reform, especially in the private sector health care system. We know now that Social Security is not in bad shape, in fact it will be needed in it’s original intended form now more than ever. Medicare, Federal, state and education budget problems are largely inflationary fueled by runaway profit taking and rising costs in the health care and energy sectors. Fix that first. Do it now because it's the right thing to do.

Note: This post was delayed a few days awaiting the Janesville Gazette's expected feature presentation of Ryan's recent media blitz. None yet, perhaps later this week.