We know how the Ryan/Romney budget plan to tackle our debt throws the poor, infirm and the elderly under a bus. But it is increasingly clear how this budget plan, while not even serious about tackling our national debt, would throw the middle class under it as well.
Paul Ryan's budget plan has been his political calling card. And if that plan wasn't given a full and thorough hearing when it was first introduced and passed by the House of Representatives in late March, it has naturally received a more widespread hearing since becoming Mitt Romney's pick as a running mate. The scanty numbers quoted in that budget don't add up to get our national debt under control, as Nobel-prize winning economist Paul Krugman and others have pointed out, but one policy choice is clear from it -- the most vulnerable people in our country will take an immediate and unwarranted share of the cuts that it contains, including $800 billion in Medicaid and $130 billion in food stamp cuts over the next ten years.
The less discussed "secret" of the Ryan plan is how middle class workers will be equally squeezed. One of Ryan's big ideas is to simplify the tax code down to two brackets, with rates of 10% and 25%. For middle class people making between $40,000-$125,000 a year, there will be some small tax savings. In practice, the vast majority of the tax "cuts" will accrue to the richest among us: the bipartisan tax policy center has estimated a tax cut of about $14,000 for the top 20% of income earners, while expecting a savings of more than $155,000 for the top 1%.
Proposed changes for income from investments, held by and large by the wealthiest Americans, continues this pattern: The tax rate on long-term capital gains is 15%, already the lowest it has been in our history, will decrease further under the Ryan budget -- to zero. It proposes the end of the estate tax, one of the few remaining tax burdens on the wealthy. Under the Ryan plan, revenue will be enhanced by closing tax 'loopholes" and entitlements -- but the largest of these, the deductions from mortgages and insurance premiums, are critical to the middle class. For many middle class families, affording a home is only possible with the help of mortgage deductions.
Joseph Stiglitz, another Nobel-prize winning economist has shown in his new book, The Price of Inequality how tax policy in the last two decades has been the overwhelming force to concentrate more and more of the wealth of this country in fewer and fewer hands. As that wealth becomes scarcer to those underneath this last tenth of the one percent, the opportunities for upward mobility, better jobs and higher living standards become scarcer as well. The Ryan/Romney budget plan only accelerates this trend with every proposal it makes.
In fact, It doesn't just throw poor people under the bus. It makes it much more difficult for middle class families to attain an American dream for themselves and deliver to their kids a better future than they themselves have had.
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