When pressed during a local Wisconsin interview, Paul Ryan admitted that the whole Romney tax plan is based on the trickle down theory that more tax cuts will magically bring growth and prosperity.
Here is the audio:
Charlie Sykes: Let’s talk about some of those TV ads because one of them is hammering away at the Romney tax plan, saying—and I know you and Chris Wallace went back and forth on math, so I want to be more direct about it. The Obama Campaign is saying that the average middle class family could pay as much as $2,000 more under your tax plan. Very specifically, if there is a couple making $60,000 a year, can you assure them that under your tax plan, that they will not be paying more money out of pocket?
Paul Ryan: Unequivocally, the answer is yes. These ads are totally false. That statistic and number has been thoroughly discredited but that still doesn’t prevent the President from putting these things up there on TV. Look, the point—you know, I like Chris, I didn’t want to get into all of the math of this, and have everybody start changing the channel. Look, we raise $1.2 trillion or so in the income tax every year. And we have about a $1 trillion every year in tax preferences. And the people who use most of those are people in the higher income brackets. And so what we’re saying is, we’re going to lower tax rates for everybody across the board by 20%, and we can pay for that without losing revenue by closing loopholes for people at the top end of the income scale. Everybody gets lower tax rates as a result. And you can keep these preferences for middle class taxpayers and have 20% lower tax rates. That means more take home pay, more economic growth. Every time we’ve done this kind of tax reform, whether it was Ronald Reagan or Tip O’Neill or Jack Kennedy, lowering tax rates creates growth and prosperity. More of a wealthy person’s income is subject to taxation because they can’t use tax shelters. And since more of their income is taxed, that allows us to lower everybody’s tax rates.
Not only does Ryan let the cat out of the bag, and admit that their whole tax cut scheme is predicated on trickle down economics, but he seems to be working off of an entirely different script than Mitt Romney.
Just four days ago, Romney told the Toledo Blade a completely different story about how he would pay for his tax plan, “These are the kinds of things that get worked out in Congress, as you go back and forth between Democrats and Republicans, very much like you go back to the Reagan plan, he talked about bringing taxes down.”
Paul Ryan was actually telling several different lies about the Romney tax plan. The idea that the wealthy won’t get a tax cut is a matter of semantics. The Romney plan cuts capital gains taxes, which is where most of the wealthiest Americans make their money. The second central lie is that the middle class won’t pay more. No matter how the numbers are crunched, in order to make Romney’s plan work, someone has to pay more. Since Romney is already on record as believing that the rich are overtaxed, and 47% of America are victims, it is pretty easy to see who his tax hikes will be targeting.
The biggest lie to come out of Ryan’s mouth was the fallacy of trickle down growth.
A recent report by the non-partisan Congressional Research Service found no relationship between lowering tax rates on the wealthy and economic growth,
The top income tax rates have changed considerably since the end of World War II. Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s;
today it is 15%. The average tax rate faced by the top 0.01% of taxpayers was above 40% until the mid-1980s; today it is below 25%. Tax rates affecting taxpayers at the top of the income distribution are currently at their lowest levels since the end of the second World War.
The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. As measured by IRS data, the share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. At the same time, the average tax rate paid by the top 0.1% fell from over 50% in 1945 to about 25% in 2009. Tax policy could have a relation to how the economic pie is sliced—lower top tax rates may be associated with greater income disparities.
Paul Ryan admitted that the Romney tax plan is more of the same trickle down fairy dust that hasn’t worked for the last three plus decades.
The reality is that the economy grows more when the top tax rate is higher, “The economy grew at 3.86 percent from 1950 to 1970, when the average top marginal income tax rate was 84.8 percent. From 1987 to 2010, when the average rate was less than half that (36.4 percent), economic growth was far less robust, 2.85 percent. From 1987 through 1992, the top average marginal income tax rate was 33.3 percent. Economic growth averaged 2.31 percent. From 1993 through 2002, after taxes increased under President Clinton, the average top marginal rate was 39.5 percent. Economic growth averaged 3.68 percent. Finally, from 2003 through 2007, after the Bush tax cuts, the average top marginal rate was 35 percent. Economic growth averaged 2.79 percent.”
What Romney and Ryan are proposing wouldn’t grow the economy. It would increase income inequality.
The Romney campaign has avoided comparing their plan to trickle down economics, but Paul Ryan let the cat out of the bag, and confirmed that the Romney plan is a tripling down of the Bush tax cuts for the rich.
The Romney/Ryan tax plan is really a massive redistribution and institutionalization of wealth at the top. The Romney plan will shift the tax burden to the middle and bottom earners and made economic advancement even more difficult.
Mitt Romney and Paul Ryan would rather protect the wealth of a few than create opportunity for you.
Ryan is proving to be more of a campaign liability than the Romney people could have ever imagined. He is clearly off message and trapped in his own Randian la-la land. Ryan has had a difficult couple of days trying to defend a tax plan that has hidden intentions. Instead of being the ideal numbers guy, Ryan is looking like what he is. Paul Ryan is nothing more than a House tea party darling who is wilting under the pressure of the national spotlight. He is off message, and looking increasingly like he is inching himself off the Romney reservation.
The media is pressing Romney’s boy wonder for details, and the not ready for the big stage running mate is starting to get off message and crack.