On July 14th, the IRS held a public hearing for the debt-equity rule (section 385 of the IRS code) that the Treasury Department proposed last April. The hearing, which had as many as 16 speakers from various industries,...
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- Biden, Ryan Give Tax Policy Rationales
Biden, Ryan Give Tax Policy Rationales
Last night's vice-presidential debate between Joe Biden and Paul Ryan included an exchange on tax policy, where each laid out their ticket's rationale for their tax policy stands:
RADDATZ: OK, on to taxes. If your ticket is elected, who will pay more in taxes? Who will pay less? And we're starting with Vice President Biden for two minutes.
BIDEN: The middle class will pay less and people making $1 million or more will begin to contribute slightly more. Let me give you one 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 of that goes to people making a minimum of $1 million.
We see no justification in these economic times for those, and they're patriotic Americans. They're not asking for this continued tax cut. They're not suggesting it, but my friends are insisting on it; 120,000 families by continuing that tax cut will get an additional $500 billion in tax relief in the next 10 years and their income is an average of $8 million.
We want to extend permanently the middle-class tax cut for – permanently, from the Bush middle-class tax cut. These guys won't allow us to. You know what they're saying? We say "let's have a vote – let's have a vote on the middle-class tax cut and let's have a vote on the upper (ph) tax cut; let's go ahead and vote on it."
They're saying no. They're holding hostage the middle class tax cut to the super wealthy. And on top of that, they've got another tax cut coming that's $5 trillion that all of the studies point out will in fact give another $250 million - yeah, $250,000 a year to those 120,000 families and raise taxes for people who are middle income with a child by $2,000 a year.
This is unconscionable. There is no need for this. The middle class got knocked on their heels. The great recession crushed them. They need some help now. The last people who need help are 120,000 families for another - another $500 billion tax cut over the next 10 years.
RYAN: Our entire premise of these tax reform plans is to grow the economy and create jobs. It's a plan that's estimated to create 7 million jobs. Now, we think that government taking 28 percent of a family and business's income is enough. President Obama thinks that the government ought to be able to take as much as 44.8 percent of a small business's income.
Look, if you taxed every person and successful business making over $250,000 at 100 percent, it would only run the government for 98 days. If everybody who paid income taxes last year, including successful small businesses, doubled their income taxes this year, we'd still have a $300 billion deficit. You see? There aren't enough rich people and small businesses to tax to pay for all their spending.
And so the next time you hear them say, "Don't worry about it, we'll get a few wealthy people to pay their fair share," watch out, middle class, the tax bill's 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 10 businesses, they file their taxes as individuals, not as corporations. And where I come from, overseas, which is Lake Superior, the Canadians, they dropped their tax rates to 15 percent. The average tax rate on businesses in the industrialized world is 25 percent, and the president wants the top effective tax rate on successful small businesses to go above 40 percent.
Two-thirds of our jobs come from small businesses. This one tax would actually tax about 53 percent of small-business income. It's expected to cost us 710,000 jobs. And you know what? It doesn't even pay for 10 percent of their proposed deficit spending increases.
What we are saying is, lower tax rates across the board and close loopholes, primarily to the 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.
He'll keep saying this $5 trillion plan, I suppose. It's been discredited by six other studies. And even their own deputy campaign manager acknowledged that it wasn't correct.
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