Paul Ryan Tax Plan Could Raise Middle Class Taxes, Said Panel
Paul Ryan's budget plan is in the hot seat for the middle class' higher taxes.
Aug. 14, 2012— -- While Mitt Romney would reportedly pay less than one percent of his income in taxes under Paul Ryan's previous tax plan, most Americans making less than $200,000 would see a tax hike under the budget of Ryan proposed before his selection to be Romney's running mate, according to a report by Sen. Robert Casey Jr. (D-Pa.)
Most of Romney's income is comprised of interest income, capital gains and dividends, which are not taxed under the plan Ryan first introduced in 2010.
Ryan proposed two tax rates, 10 and 25 percent, instead of the current six.
The House Republican budget for the 2013 fiscal year, passed by the House in June, would raise taxes by $1,358 for jointly-filing households earning between $50,000 and $100,000, assuming the additional income is taxed at a 10 percent rate, according to a report published earlier this summer by the Joint Economic Committee of Congress, authored by its chairman, Casey.
Households with incomes between $100,000 and $200,000 would see their taxes increase by $2,681, the Joint Economic Committee said.
Rep. Ryan's office did not return a request for comment.
The committee reported Ryan's budget plan would give the richest Americans -- those who make over $1 million -- a tax break of about $300,000.
Rep. Kevin Brady (R-Texas), vice chairman of the Joint Economic Committee, fired back, saying the report used data from the Tax Policy Center, which defines income and taxes "significantly differently than the IRS data used elsewhere" in the report.
Brady said the report tries "to exaggerate the size of the average tax savings for higher-income taxpayers from individuals and corporate income tax rate reductions before any offsets from eliminating deductions and exclusions."
According to the Center for Budget and Policy Priorities, Ryan's budget plan would make the Bush tax breaks permanent, including the extra tax cuts on taxable household income above $250,000, and would cut the top tax rate paid by the wealthiest Americans and the corporate income tax rate by nearly 30 percent.
Americans for Tax Fairness Action, a left-leaning political group, criticized Ryan for giving tax breaks to millionaires and ending the Medicare guarantee.
"The bottom line is that our tax system is rigged in favor of the wealthy and big corporations who play by their own set of rules," said Sean Crowley, communications director for Americans for Tax Fairness Action. "The tax system is not working for most Americans. The richest already get the biggest tax breaks. It's not fair and we need to radically overhaul our tax system."
President Obama's proposed budget has not been without its critics also. A report commissioned by pro-business groups including the United States Chamber of Commerce and prepared by accounting firm Ernst and Young found raising tax rates for high-income taxpayers could decrease output in the long-run by 1.3 percent of $200 billion and lead to a drop in employment by 0.5 percent or 710,000 jobs.