off the charts
BEYOND THE NUMBERS
BEYOND THE NUMBERS
Ryan Plan’s “Path to Prosperity” Is Just for the Wealthy
House Budget Committee Chairman Paul Ryan’s name for his budget — “The Path to Prosperity” — is a cruel joke. One of this nation’s core beliefs is that if you work hard and act responsibly, you can get ahead, raise a family, and have a decent life. That was never more true than in the three decades after World War II, when the path to prosperity was wide enough to accommodate a broad swath of Americans. That path narrowed considerably starting in the mid-1970s, however, when the relationship between economic growth and the living standards of average Americans broke down. For the last three decades, nearly all the gains of economic growth have gone to the tiny sliver of people at the top of the income scale. The challenge for policymakers is how to restore opportunity for middle- and lower-income Americans by once again widening the path of prosperity. Unfortunately, Chairman Ryan’s plan would narrow it further. For the wealthy, Ryan’s proposals are pure gold:
- A typical hedge fund manager would benefit from Ryan’s extension of the Bush tax cuts for high-income people; the average person making at least $1 million a year would get $125,000 a year in tax breaks.
- Heirs to multi-million-dollar estates would benefit from Ryan’s estate tax proposal, which would let them inherit the first $10 million in estate value entirely tax-free.
- High-income investors would benefit from Ryan’s elimination of Medicare taxes on their investment income.
- And large numbers of high earners would benefit from Ryan’s call to cut the top rate to 25 percent, the lowest in 80 years.
- slash Pell Grants, which help low- and moderate-income kids pay for college (Ryan says the program has been growing “recklessly”);
- slash federal aid to states, which would probably have to respond by imposing large tuition hikes for community colleges and public universities; and
- kill recent improvements in the American Opportunity Tax Credit that have made it available to the people who need it most — those from lower-income families.
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