We released a report today examining the tax proposals in House Budget Committee Chairman Paul Ryan’s budget plan, which the House approved on April 15. As it explains, those proposals:
place a top priority on cutting taxes for high-income people, while doing nothing to reduce budget deficits, themselves. In addition to making the Bush tax cuts permanent and continuing to provide relief from the Alternative Minimum Tax (AMT) at a cost of nearly $4 trillion over ten years, the House budget advances a series of additional tax cuts that would primarily benefit high-income households at a cost of nearly $3 trillion over that period, most of which is assumed to be offset by reductions in tax expenditures that are left unspecified.
The table outlines those proposals. Roberton Williams of the Urban Institute-Brookings Institution Tax Policy Center (TPC) has noted that, “[v]irtually all of the tax savings from [these additional proposals] would go to households making upwards of $200,000 — the 5 percent of tax units who currently face marginal rates over 25 percent.”
The House budget plan assumes that $2.5 trillion of this $2.9 trillion in additional tax cuts would be paid for by broadening the tax base through changes in tax expenditures. But the base-broadening measures are left entirely unspecified. In addition, as TPC’s Williams has explained, even if the House were to follow through on the commitment to offset $2.5 trillion of these costs, the net result would be “very likely to make the tax code much more regressive than it is today.”
Click here for the full report.