Ryan on Obama Tax Plan: 'Watch Out Middle Class ... Bill Is Coming to You'

Rep. Paul Ryan says there are not enough rich people in U.S. to pay for Obama-Biden spending.
3:00 | 10/11/12

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Transcript for Ryan on Obama Tax Plan: 'Watch Out Middle Class ... Bill Is Coming to You'
I would like to move on to a very simple question for both of you and something tells me. I won't get a very simple answer but let me ask you this game is simple answers raising the cost and it. Okay on to -- this if your ticket is elected. Who will pay more in taxes. Who will pay -- -- -- -- with vice president -- for two minutes middle class will pay less than people making a million dollars -- war began to contribute slightly more let me give you -- concrete example. The continuation of the bush tax cuts we are arguing that the bush tax cuts for the wealthy should be allowed to expire. Of the bush tax cuts for the wealthy 800 million billion dollars of that goes to people making minimum million dollars. We see no justification these economic times for those -- their patriotic Americans there they're not asking for this continued tax cut. They are not suggesting that but my friends are insisting. A 120000. Families by continuing that tax cut. We'll get an additional 500. Billion dollars in tax relief for the next ten years and their income is an average of eight million dollar. We want to extend her -- in the middle class tax cut for. Permanently from the bush middle class tax. These guys -- lost you know -- -- we say let's have a boat. Let's have a -- on the middle class tax cut and let's have a vote in the upper tax cut let's go right about not they're saying now. They're holding hostage. The middle class tax cut to the super wealthy. And on top of that they got another tax cut come. That's five trillion dollars that all the studies point out well in fact. Give another 250. Million dollars. Two -- 120000 families. And raise taxes for people who are middle income when the child. By 2000. Dollars a year this is unconscionable. There is. No need for days the middle class got knocked on their heels the Great Recession crushed. They need some help the last people -- need help. Our 120000. Families for another another 500. Billion dollar tax cut over the next ten years. Congressman. Our entire premise of these tax reform plans to grow the economy and create jobs if the -- -- -- streets -- millions ups. Now we think that government taking. 28%. Of families and businesses -- -- is enough. As an Obama. Thinks that the government ought to be able to take as much as 44 point 8% of a small businesses and come. Look if you taxed every person in successful small business making over 250000 dollars -- -- 100%. Italy -- on the government for ninety days if everybody who paid income taxes last year including successful slogans is double their income taxes this year. Would still have a 300 billion dollar deficit. -- -- There aren't enough rich people and small businesses to tax. To pay for all they're spending. And so the next time you hear them say don't worry about it. We'll get a few wealthy people who pay their fair share watch -- middle class attacked those coming to you. That's why we're saying we need fundamental tax reform let's take a look at it this way. Eight out of ten businesses they file their taxes as individuals not as corporations. Where I come from overseas which is Lake Superior to the Canadians they drop their tax -- to 15%. The average tax rate of business is industrialized world is 25%. And the president wants the top effective tax rate. Unsuccessful small businesses to go about 40%. Two thirds of our jobs come from small businesses this one tax. Would actually tax about 53% of small business income it's expected to cost us 7101000. Jobs and you know what. It doesn't even pay for 10%. Of their proposed deficit spending increases. What we're saying is lower tax rates across the boarding close loopholes -- -- higher income people we have three bottom lines. Don't raise the deficit. Don't raise taxes on the middle class and don't lower the share of income that is borne by the high income earners -- -- keep saying -- five trillion dollar plan I suppose. It's been discredited by six other studies. And even their own deputy campaign manager acknowledged that it wasn't correct well let's let's talk about the last -- percent you have refused again. To offer specifics on how you were paid for that 20% across the board tax -- Do you actually have the specifics or are you still working on it and that's what you won't tell voters different than this administration we actually -- -- -- big bipartisan agreements. You see understand about the specifics do you have you know -- that hurt their -- congress look at what it route look at what Ronald Reagan and Tip O'Neill did. They worked together out of a framework to lower tax rates and broaden the base. And they work together to fix that what we're saying is here's our framework. Lower tax rates 20%. Wheat -- about one point two trillion dollars their income taxes we forgo about one point one trillion in loopholes and deductions. It's what we're saying is deny those loopholes and deductions to higher income taxpayers. So that more their income is taxed. Which has a broader base of -- -- -- -- can lower tax rates across the board now here's why I'm saying. What we're saying is -- -- aggregate time to respond we won a lot you'll get attacked we want to work with congress on how best to achieve this. That means successful what those specific Mitt. What we're saying lower tax -- 20%. Start with the wealthy. Were put -- you guarantee this math -- have -- six studies have guaranteed six studies have verified this method up a vice president but look it's vice president by. -- tremendously. Let me images featuring a comeback in the second and right first of I was there -- Ronald Reagan taxpayers should he gave specifics of what he was gonna cut no number one in terms of tax expenditures go over to. 7% of the small business America pay. Less that make less than 250000. Dollars me tell you some of those other small business hedge funds the next 6800. Million dollars a year. That that's -- they count as small as. Visits because their past let's look at how sincere they are. Ronald -- community governor Romney on sixty minute minutes I guess is about ten days ago was asked governor. You pay 14%. On twenty million dollars or Macon 50000 dollars. Pay more than that do you think that's -- -- Oh yes that's fair that's fair. This is an arrogant talk everything these guys are gonna wapner and cut those loopholes the loophole the biggest -- they take advantage -- the carried interest loophole. And and capital -- loophole. -- -- -- Now there's not -- the reason why the AEI study the American Enterprise Institute study -- Tax Policy Center study. The reason all say it's -- taxes grew up in the middle class the only way you can find five trillion dollars. In loopholes. Is cut the mortgage deduction for middle class people cut the health care deduction middle class people. Take away their ability to get a tax break to send their kids good colleague. That's why there if I'm wrong about that -- is. -- about that. There -- -- -- you can cut tax rates by 20%. And still preserve these important references for middle class taxpayers not mathematically posse it is mathematically possible. It's been done before -- -- we're proposing it has never been done before it's been done a couple of times against never reject any lower tax rates increased growth -- already out -- Jack Kennedy Ronald Reagan. Republicans and Democrats Republicans and Democrats. Have worked together on this election and you guys aren't used -- doing by origin and what do when we did it publicly to present Eric with embryonic work was sent to fill in the details that's exactly so that's how you get things done. -- -- -- But let me say at this way. I was governor Republican congress working bipartisan -- -- 7% rating. Mitt Romney was governor of Massachusetts where eighty -- percent of legislators -- -- for Democrats. He didn't demonize them in demagogue them in -- those party leaders every week. He reached across the -- he didn't compromise principles and is -- on the ground. Any balance of a solid if I disagree I disagree I don't have a passport not about ratings -- why isn't even contesting Massachusetts -- -- as -- asked -- Does suggest what would you suggest beyond raising taxes on the wealthy that would substantially. Just -- taxes X. Fire like they're supposed to on those millionaires. We don't we can't afford 800 billion dollars going to people making a minimum million dollars they do not need -- -- Those 120000. -- make eight million dollars a year middle class people need to help. Why does my -- cut out the tuition tax credit for the XYZ go -- and child flaring off why -- you declare anything off limits. That we're saying -- -- arms high interest loan mortgage desire for higher income people here. Can you guarantee that no one is -- in -- 100000 I'll have a mortgage. This mortgage deduction impacted this -- a million small business. He keeps trying to make you think that it's just some movie star hedge fund guy -- decent actors and the small businesses make less than 250000. Dollars a year would not you know it Wednesday -- A million small business -- 97% of the -- it effects on the walls all businesses. Who are greatest job I wish I get the greatest actor. Did you find out -- thing about this budget and you're going to increase. The defense what does it cut the defense budget like they're they're proposing -- billion dollars that's not -- -- -- -- -- I don't know massive. There were saying if they don't increase the Oregon defense now let yes or I do so because that's another -- -- right -- -- it is that so. -- -- proposed a 470 billion dollar cut to defense to begin with. Now we have another 500 billion dollar cut to -- that's lurking on the horizon. They insisted upon that cut being involved in the debt negotiations. Let lettuce and now let's watch automatic defense cuts like OK OK let's let's let's back no one wants out but I want to know how to do the math and have this increase. In two trillion dollar if you don't cut defense by trimming that's what we're talking about -- what what the national security issue -- announced -- -- -- We're gonna cut 80000 soldiers 20000 Marines. Hundreds when he. Cargo planes were to push the joint trying lie down or cutting wants them arms and one war. If these cuts go through our navy will be -- small and is it the smallest it has been since before World War I. This invites weeks look do we believe in peace through strength you that we do and that means you don't impose these devastating cuts our military. So we're saying don't cut the military by -- trillion dollars but increase it by a trillion don't can't -- trillion. Quickly Vice President Biden and not one of them we don't cut it and I might add this so call I know we don't use different -- sequester this automatic -- That was part of a -- deal that they asked for and let me tell you my friend said at a press conference announcing his support of the deal he said -- perfect we've been looking for this moment for a long time. -- they would then it. We -- shot partisanship for a long time and so the bipartisanship was -- -- voted for the automatic cuts in defense that they didn't act. And that asked for another look the military says we need a smaller -- army. We need more special forces we need. We don't ignore M one tanks what we need is more coming -- -- right -- -- -- over the military that was the decision of the joint. Chiefs of staff. Recommended to us and agreed to by the president -- and the fact million later. They made the recommendation. First.

This transcript has been automatically generated and may not be 100% accurate.

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