The Post reports: President Trump and House Speaker Paul D. Ryan both want to rewrite the tax code, but their proposals differ on how much tax relief to give the middle class. Trump wants a tax cut across the board, according to the plan he published during the campaign. He has proposed relief for the wealthy especially, but also for less affluent households. The plan that Ryan (R-Wis.) and his colleagues in the House have put forward would not substantially reduce taxes for the middle class, and many households would pay more.
Let’s start by acknowledging that Speaker of the House Paul Ryan is utterly tone deaf and even after the election and the health-care fiasco entirely clueless about the class divide threatening to tear the country apart at the seams. On health care, Ryan wanted tax cuts for the rich; cuts in Medicaid and subsidies for the working poor (especially older ones in rural America); and repeal of essential health services.
Try as some conservatives might to blame the Freedom Caucus for the health-care failure, how many people in the country wanted Ryan’s health-care plan, which looked like it was drafted by a committee of robber barons? (Seventeen percent, according to one poll.) Now Ryan wants a plan that cuts taxes for the rich and costs many Americans more so. . . . Wait. Isn’t this where we left off, namely an anti-populist plan at odds with the message of the 2016 presidential election? Yes.
In the case of taxes, both Trump and Ryan ignore palpable distaste for widening income inequality and the risk of enlarging the already enormous debt. However, in this case, Ryan is more wrong than the president, if only because Ryan offers the working poor and middle class so little. At least Trump would have the argument that the middle class gets something along with the rich:
Trump’s plan arguably reflects his unique style of conservative populism. The proposal would be extremely costly for the government, and the president’s past comments suggest he would be willing to put the federal government deeper into debt to fund breaks for the middle class.
Ryan’s plan would instead simplify and streamline the tax code in accordance with conservative orthodoxy, eliminating the goodies for households with modest incomes that Trump would preserve or expand. In all, taxpayers with roughly average incomes could expect a tax cut of around $1,100 a year under Trump’s plan, compared to just $60 under Ryan’s plan once the proposals were fully implemented.
Ryan’s plan gets worse, however. Ryan want to fill the revenue gap created by his plan with a border adjustment tax. That idea makes the Ryan plan even less likely to pass the Senate and less friendly toward middle- and lower-class Americans who spend more of their income on imported necessities (e.g., food, clothing, household goods) that will include a new tax paid by consumers.