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Posted at 7:00 AM ET, 03/11/2011

Ryan opens the tax door?

By Matt Miller

On the Paul Ryan watch, an item worth noting from an AP report Thursday. Recall that Rep. Ryan's "Roadmap" incurs at least $62 trillion in debt because it keeps taxes at 19 percent of GDP even as the boomers age. But here's what the Associated Press reported Thursday:

Many Democrats and even a few Republicans in the Senate say the only way to tackle the nation's financial problems is to address both taxes and spending. But don't expect Ryan's budget plan to include any new taxes.
However, in a break with many Republicans, Ryan did open the door to higher taxes in the future, but only as part of a comprehensive overhaul of the tax code, and only after the big benefit programs have been reformed.
"If we just do a tax compromise without fundamentally fixing spending, then we're just fueling more spending," he said. "Do I believe you can get slightly higher revenues without harming jobs, and get better economic growth? Yes, I do believe that. But I don't think it's a worthwhile exercise if you don't deal with the problem and the problem is spending.'" [emphasis added]

Not a full embrace of reality, but every little step in reality's direction should be encouraged. And if this means the absence of taxes in Ryan's Roadmap reflects the Wisconsin lawmaker's negotiating stance and not his intellectual dishonesty, then that's a relevant thing to know. Ryan still can't be praised in this case as a "bold," "courageous" "thinker." But he does become a more interesting pol.

By Matt Miller  | March 11, 2011; 7:00 AM ET
Categories:  Miller  | Tags:  Matt Miller  
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Comments

I'd like to think that many conservatives who are fully opposed to higher taxes would find them more palatable if they were accompanied by a major overhaul of the tax code that simplified it greatly. The problem is that by removing the vast number of deductions and credits you're going to upset numerous interest groups.

Posted by: Fitz157 | March 11, 2011 8:26 AM | Report abuse

Why is it news everytime a Republican embraces reality?

Posted by: newsraptor | March 11, 2011 8:42 AM | Report abuse

I hear people talk about earmarks all the time. Sometimes earmarks become very famous such as the bridge to nowhere in Alaska. However, when people talk about earmarks, they are talking about the little ones. The ones that truly matter are contained in the tax code. Conservatively and I mean conservatively, there are at least 1,1 trillion dollars worth of earmarks in the tax code and possible as much as 1,5 trillion dollars worth of earmarks in the tax code. If you seriously want to see where money to deal with our fiscal and debts problems can be found, I have just pointed you in the right direction. If you want to know how we could reduce taxes, I have just pointed you in the right direction. Simply put, we need to reform the tax code. Sadly, the possibility of real tax reform in this country will be blocked by special interests. Welcome to the broken American political system.

Posted by: jeffreed | March 11, 2011 10:45 AM | Report abuse

No Mr. Miller. You are the one who is intellectually dishonest.

Businesses incur debt all the time. If they have a plan to use the proceeds and pay them down, the market is not bothered by the debt.

In Ryan's case, he has a plan to use debt to temporarily fund the benefits that were irresponsibly promised and then to pay the debt back. It is a definitive plan - as much as that can be done over a long period of years.

You can certainly argue with whether the plan relies on good or bad assumptions. But it as least a plan.

Your plan, on the other plan, is to vastly increase taxes, which would sap current investment and most surely result in lower growth rates and therefore less opportunity for those less fortunate - those you purport to champion.

The poor need economic growth more than the rich. A rising tide lifts ALL boats.

The current administration has no plan. They are spending and incurring huge debt with little in the way of ideas of how to pay it back. That's why we are going to suffer inflation and the gradual depreciation of our currency. That will also hurt our standard of living.

This president is hurting those he purports to help. Inflation is a disastrous hidden tax on the poor. The rich don't pay it - they own the factories, farms and means of production. They will raise their prices. They will raise their incomes and pay the tax and pass along the cost to those who consume.

The better path is to foster investment, foster opportunity through making capital more accessible and allow the poor the opportunity to build their own lives. Not waiting for some government bureaucrat to hand them something.

Of course, statist politicians like tax increases. They allow them to accumulate power by having the ability to hand out benefits. They fear a populace that is self sufficient and not in need of their largesse.

That's why we have the system we do. What we really need are much smaller Congressional and state legislative districts that remove the power of campaign money and union workers. Smaller districts would allow average Americans to know and influence their representatives on the issues - not looking for handouts of money.

John Cox

Posted by: jcox998 | March 11, 2011 11:14 AM | Report abuse

The big question in the budget debate is why the Democrats aren't insisting on raising taxes on the wealthy, when the public supports this as a method to reduce the deficit.

This would also reduce income inequality which is higher in the U.S. than any other developed country. The top 1% of earners in the U.S. take in almost 24% of all income, whereas 30 years ago they took in 9%. And it is continuing to get worse - we are now in the banana republic range of income inequality.

Amazingly, the overall tax burden (federal plus state and local) as a percentage of GDP is already lower in the U.S. than all other developed democracies - for example, in the U.S. it has hovered in the mid-20s, while Germany, held up as a model of fiscal austerity by conservatives, spends 40% of GDP on government. In addition, raising taxes on the rich is the least likely way of negatively impacting the economy as we try to close the deficit. The rich and their corporations are now swimming in cash, with record profits reported by Wall Street, but they are not investing it in jobs.

Posted by: Poster3 | March 11, 2011 11:44 AM | Report abuse

John Cox wrote (most of comment omitted):
"The poor need economic growth more than the rich. A rising tide lifts ALL boats."
------------------------------------------
Your first sentence is true. If only your second sentence were true as well. It is not true NOW, although it may have been true when JFK called for tax cuts a half-century ago. During the first decade of THIS century the benefits of what you call the "rising tide" went almost exclusively to the wealthiest in our society. So it looks like it was a selective tide that lifted only the biggest boats. Real incomes for MOST people stagnated or actually declined (adjusted for inflation).

I am not arguing that in a (largely) free market economy that we should only have one size of "boat." There will always be disparity in "boat size," much of which CAN work as an incentive for people to work hard to earn enough to buy bigger "boats." I agree with you that communism doesn't work. But when the disparity curve worsens--in my book, that means that the degree of disparity becomes greater--we have a problem. You can blame statist politicians if you want, but when the economic condition of those in the middle class is compromised DISproportionately in comparison to those above them, you're asking for trouble. If that trouble gets bad enough (we both certainly hope not), then we could be talking about "second amendment solutions" that those on the far right fringies just love to talk about, but in a way far, far different way than they intend.

Americans probably do understand and can accept sacrifice, but they want it to be shared. That hasn't really happened in the 21st century.

Posted by: post_reader_in_wv | March 11, 2011 12:16 PM | Report abuse

John Cox wrote:
"Your plan, on the other plan, is to vastly increase taxes, which would sap current investment and most surely result in lower growth rates and therefore less opportunity for those less fortunate - those you purport to champion.

The poor need economic growth more than the rich. A rising tide lifts ALL boats.

The current administration has no plan. They are spending and incurring huge debt with little in the way of ideas of how to pay it back. That's why we are going to suffer inflation and the gradual depreciation of our currency. That will also hurt our standard of living."


First of all, Mr. Miller didn't advocate for tax increases, he merely pointed out that there is movement on the Republican side to consider potential tax increases at some point down the road.
The other point is that it's odd to worry about inflation (too much money chasing too few goods), when disposable income is declining among the less than rich segments of society. It's precisely the opposite we need to worry about. Deflation is all but certain as demand continues to weaken. If you studied any economics at all in school, then you might see that weak demand leads to less production (or production moving to where demand is, i.e. China and India). As companies draw down their stock of goods, there will be even less incentive to build up inventory here, to satisfy already slack demand. The way to increase demand is to have disposable income increase, to a broad section of the population. It doesn't do any good for the richest slice of consumers to sit on ever greater wealth. This isn't a political argument, it's an observation of reality. The rich have been getting much richer since 1980, but consumer demand has continued to fall, as good paying jobs dry up, to be replaced by low paying jobs in foreign countries. You can only buy so many mansions and yachts, certainly not enough to generate widespread disposable income to fix our demand problem.
The only inflation we're seeing now, is not from supply and demand, but from speculation on commodity prices. No non-regulatory solution exists for that problem. Unless you believe voluntary restraint by commodity traders is likely any time soon. Don't hold your breath...

Posted by: shumanpk | March 11, 2011 1:36 PM | Report abuse

Fitz157 posts March 11, 2011 8:26 AM
“I'd like to think that many conservatives who are fully opposed to higher taxes would find them more palatable if they were accompanied by a major overhaul of the tax code that simplified it greatly. The problem is that by removing the vast number of deductions and credits you're going to upset numerous interest groups.”


Step outside the box people ...
The solution is a transaction tax
http://www.apttax.com/

But I’m sure republicans would oppose it because …. It includes Wall Street.

And of course Ryan leaves out his favorite republican entitlement programs … agriculture, oil/coal/gas, big pharma and the military industrial complex.

Stop the madness … adopt a Transaction Tax now before the U.S. is truly bankrupt.

http://www.apttax.com/

Posted by: knjincvc | March 11, 2011 1:44 PM | Report abuse

"Rep. Ryan's "Roadmap" incurs at least $62 trillion in debt "

And what is the interest on $62 Trillion dollars??? Ryan's plan does not include a real payoff date does it.
Sooo ...Who will be stupid enough to bankroll Ryan's folly?

Posted by: knjincvc | March 11, 2011 1:50 PM | Report abuse

To: John Cox

Are you aware that 75% of Americans earn less than $77,000 per year? I'm in this group are you?

Are you aware that the median income in America is $47,000 per year.

Are you aware that the poverty level for a family of four is $22,000 per year. That's $10.58/hour.

Supposedly 47% of American household pay no federal income tax because they earn so little.

Sooo ... where would you start to lift boats?

Posted by: knjincvc | March 11, 2011 2:45 PM | Report abuse

Anyone serious about fixing the debt problem knows any real solution must include cuts to the military and tax increases along with some spending cuts. Ryan and his fellow Republicans are not at all serious about the deficet.

They are only using it as an excuse to go after the same programs and people they have always been after.

Their "cuts" only cover a very small percentage of the budgit - not even a word about their cutting defense - they plan on increasing it.

They have also called for more tax cuts in the future, and no tax increase at all.

It has become obvious to a lot of people that the Republican Party is now totally under the controll of cutural war fanatics. Exstreamists who will stop at nothing to implement their decades old plan to downsize America and the American dream.

They are only using the deficet - that they had a very large hand in creating - to pull a clasic bait-and-switch on the American people.

And a bunch of these morons are running around Washington calling for us to invade Libya!

Reality is not something the Republicans do.

Posted by: gooch733 | March 11, 2011 3:07 PM | Report abuse

Why is it bold and courageous to steal more from the American Taxpayer? If you want to be really bold and courageous why don't you address the 43 million that pay no federal income tax? If you tax these freeloaders 5% minimum you will generate 53 billion dollars per year, twice as much as stealing from those who work hard would generate.

Posted by: Pilot1 | March 11, 2011 6:04 PM | Report abuse

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