Inequality is a hot topic these days. Everyone seems to want to write about it. The launch of TheUpshot, the new project from the New York Times, included a story on the wealth of the middle class, the Times Sunday...
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- The Paul Ryan Budget Plan
The Paul Ryan Budget Plan
The House Budget Committee, chaired by Congressman Paul Ryan (R-WI), released its budget proposal today, and tax reform is a significant component. On the individual income tax side, Congressman Ryan would consolidate our current six brackets, taxed at rates from 10% to 35%, into two, taxed at 10% and 25%. He also would eliminate the Alternative Minimum Tax.
On the corporate income tax side, the Ryan budget reduces the top rate from 35% to 25% and shifts to a "territorial" tax system in which the U.S. would tax only income earned within its borders. (This would allow multinational corporations to bring home profits earned abroad without paying additional taxes.)
These tax cuts are paid for with base broadening measures and the elimination of various deductions, credits, and loopholes. The plan is not specific about precisely what would be cut, but it does propose that the base broadening be of sufficient magnitude to be revenue neutral in the short term. Given the significant rate reductions and AMT elimination, it's likely that this would require the elimination of most tax expenditures and a complete overhaul of the tax code.
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The Tax Policy Blog is the official weblog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.