Paul Ryan Elected Speaker of the House - Where he Stands on Taxes
There’s a shakeup on the horizon in the name of Paul Ryan. As the new Speaker of the House, this Republican representative previously introduced a number of policy changes through the House Budget Committee to significantly transform the landscape of taxes and who they will affect. One of the most controversial issues surrounding these policy changes is the fact that the resources associated with these tax changes will be advantageous only to the most affluent households. The question is will any of his tax reform policies make it into pending legislation.
Here are some of Paul Ryan's tax reform proposals
The changes are huge, reducing the rates on income tax for high-income households. Other perks that will directly impact the middle class:
- Elimination of income tax on capital gains, dividends and interest
- Elimination of corporate income tax
- Elimination of estate tax
- Elimination of the alternative minimum tax
- Privatization of a large portion of Social Security
- Elimination of the tax exclusion for employer-sponsored health insurance
- End a large part of the Medicaid program, and traditional Medicare
- Eliminate the Children’s Health Insurance Program
This plan will raise taxes for the middle class, in addition to introducing a voucher system for existing health programs that would decrease in value over time. This would effectively diminish health insurance that could cover specific services. Paul Ryan feels the tax code needs to be more conducive to innovation and investment through these changes. Ultimately, his goal is to simplify the tax code, protect education savings, and abolish the estate tax.
How does this affect the rest of the country?
According to the Urban Institute-Brookings Institution Tax Policy Center, the new policies would effectively cut the taxes of the richest one percent of Americans. In addition, the tax cuts are advantageous to households with income that exceeds $1 million. The higher the income gain, the higher the tax cut for that household. The average annual tax cut would be $502,000.
The study stresses that these tax cuts will add a tax on most goods and services, which would affect three-quarters of American through new tax increases for those households that have incomes of $20,000 through $200,000. This would shift the national debt into a new high of about 175 percent of the GDP by 2050.
New Speaker Duties
As the new Speaker of the House, Ryan is already challenged with a few issues, including the $80 billion bipartisan budget agreement that was negotiated by his predecessor, and the decisions that will have to be made on the spending bill for the current fiscal year that are full of conservative policy. Additionally, he will have to decide how much of his own policies he wants to push, which will be an interesting evolution to watch.