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The ‘Party of No’ May Now Rate a New Label

Republicans in Congress have introduced a breathtaking new budget plan that would essentially put America’s plutocracy on steroids.

By Sam Pizzigati

The Republican Party, critics like to quip, has become the “party of no.” That tag no longer works. The GOP has now become, thanks to a sweeping new legislative proposal from the ranking Republican on the House Budget Committee, the “party of whoa” — as in, “Whoa, they can’t be serious.”

Rep. Paul Ryan could hardly be more serious. Admirers consider this lawmaker from Wisconsin the top GOP “idea man [1]” in Congress, and Ryan’s proposed new Roadmap for America’s Future is certainly advancing one whopper of an idea.

In a nutshell: With one in ten Americans jobless and one in eight home mortgages delinquent, Rep. Ryan wants to raise taxes on the middle class and slash them on the rich, shove Social Security retirement savings onto Wall Street, and hand insurance companies even more control over the nation’s health care.

You won’t find, of course, a hint of any of this at the ever so slick Web presence [2] House Republicans have created to pitch Rep. Ryan’s Roadmap. On the Web, and in all the publicity for this new gameplan for America, an earnest but always genial Ryan presents his Roadmap as “a comprehensive, alternative approach to the Nation’s most pressing domestic priorities.”

Enactment of the Roadmap, we’re promised, would bring us “universal access to affordable health coverage,” make Social Security “sustainable,” and establish a “simplified” tax system that “rewards work, saving, and investment.”

Growth sharesLast week, in a series of devastatingly detailed analyses, Washington’s policy wonk community neatly shredded every one of these claims. First out of the gate: the Tax Policy Center, an offshoot of the centrist Brookings Institution.

Rep. Ryan’s Roadmap, Center analyst Howard Gleckman noted [3], would annually generate “hundreds of billions” less in revenue than advertised. Its passage “would give a huge tax cut to the wealthy, while cutting taxes by little or nothing (and in some cases even raising taxes) for low- and middle-income people.”

The Tax Policy Center report on the Roadmap zeroes in on the Ryan plan’s likely impact in 2014. That becomes a somewhat complicated task, since the Roadmap actually lets taxpayers choose between tax systems.

One tax system would make the George W. Bush tax cuts enacted in 2001 and 2003 permanent. The other, a new “simplified” system, would set a 25 percent tax on family income over $100,000 and a 10 percent tax on income under.

But these tax rates would only apply to income from work. Income from investments — interest, dividends, and capital gains — would all go untaxed. Given these ground rules, and assuming that taxpayers would choose the tax system that minimizes their tax liability, the Tax Policy Center has calculated that [4] the Roadmap’s passage would, on average, save taxpayers who make more than $1 million over $633,000 in 2014.

Taxpayers in 2014 who earn between $40,000 and $50,000 would pay, under Rep. Ryan’s Roadmap, $128 more in total federal taxes.

The Center on Budget and Policy Priorities last week quickly echoed the Tax Policy Center findings — in more forceful prose. The GOP’s Roadmap, the Center posited [5], “would result in a massive transfer of resources from the broad majority of Americans to the nation’s wealthiest individuals.”

The Ryan gameplan, this Center pointed out, “would cut in half the taxes of the richest 1 percent of Americans.” Average families, by contrast, would find themselves facing a future with considerably less retirement and health security.

On health, the Center analysis explained, the Roadmap would “end traditional Medicare and most of Medicaid." In their place: vouchers whose values “would erode over time” and buy “fewer health care services.” On Social Security, the Ryan plan would cut benefits, by up to 28 percent, and divert the savings into privatized accounts that taxpayers would be obliged, if need be, to bail out.

Citizens for Tax Justice, the third of the groups to report in last week on the Roadmap, would be blunter still.

“It’s difficult to design a tax plan that will lose $2 trillion over a decade even while requiring 90 percent of taxpayers to pay more,” the research group observed [6]. “But Congressman Paul Ryan has met that daunting challenge.”

signup [7]Citizens for Tax Justice ran the numbers to see what a Roadmap America would look like in 2011. In that year, with the Roadmap in effect, the nation’s bottom 80 percent of taxpayers “would pay about $1,700 more, on average, than they would if President Obama’s proposals were enacted.”

For the richest 1 percent: an average $211,300 tax savings.

Do any of these numbers really matter? Should we be shaking in our boots at the thought of an America that actually followed Rep. Ryan’s Roadmap? Some would argue no. Ryan’s party, after all, has no congressional majority. The Roadmap has zero chance of making its way into law this year. That could change, of course, after November’s elections. The new Congress sworn in next January could have the votes to set America on the Roadmap’s course.

But the Roadmap will remain dangerous even if the November elections don’t alter the nation’s political calculus. The reason? Giveaways to the rich as outrageously blatant as Rep. Ryan’s Roadmap make our staggeringly unequal status quo look good.

Democrats, by stopping the Roadmap, would legitimately be able to claim they’ve accomplished something. But the United States, despite that victory, would remain as plutocratic as ever, with a top 1 percent that holds over $3.5 trillion [8] more in wealth than the bottom 90 percent of Americans combined and a tax system that has the super rich paying less in taxes [9] than their receptionists.

This America needs to disappear in our national rearview mirror. We need a roadmap that can help this disappearing along.

Sam Pizzigati edits Too Much, the online newsletter on excess and inequality published by the Washington, D.C.-based Institute for Policy Studies. Too Much appears weekly. Read the current issue [10] or sign up [7] to receive Too Much in your inbox.