Wednesday, March 13, 2013
The only portion of Ryan's budget that seems to be garnering bi-partisan praise is the tax overhaul. Don't get me wrong, there are still less than serious politicians out there who see the tax overhaul as another opportunity to scare the public and win votes... but many of your more serious analysts (even on the left) like the idea of simplifying the tax code by closing loopholes and lowering the overall rates.
Whereas a dishonest politician can concentrate on the fact that the upper rates will go down, making it look like a tax "cut" for the rich, someone more understanding of the current tax hole understands that if you are able to reduce rates across the board (as Ryan's plan does) that it will be of greater benefit to those who do not earn enough to take advantage of the sorts of tax loopholes that do exist.
In the simplest terms... if you close the tax loop holes, lower rates, and collect the same or slightly more income tax as you had before... the net result will be that if you do not use tax loopholes and your rates go down, even slightly, then you are receiving a tax break. If those not using tax loop holes are paying less, but the government is collecting the same or more, then by obvious mathematical fact, someone else has to be paying more. Those paying more would be those who most benefited by the tax loopholes. There really isn't a way to argue this logic... although rest assured that many politicians will.
Overall, the Ryan budget has been and will continue to be attacked for being too aggressive, not balanced, and too vague on the details. Likely all valid critiques. But what the Ryan budget does, is offer the ying to the President's yang of demanding that even an 87 billion dollar cut from a multi-trillion dollar budget is paramount to "draconian" in scope. There has to be some middle ground and eventually someone has to become realistic in identifying what programs can be cut, and eventually admitting that there isn't enough "new revenue" from the rich to balance the budget.
In the meantime, perhaps the government can do nothing more than refrain from adding "new" spending that only exasperates the problem at hand. Right, who am I trying to kid? Politicians without the ability to buy votes with promises of new programs? What fantasy land am I living in?