U.S. Rep. Paul Ryan unveiled his 2013 budget proposal today, setting the stage for an election year showdown over taxes, spending, and the size of the federal government.
The cornerstone of Ryan’s latest budget is a massive overhaul of the tax code, which House Republicans hope will give the GOP an easy-to-explain blueprint going into the 2012 elections.
Here are the highlights:
- Reduce the individual tax rate to two brackets of 10% and 25%.
- Eliminate the Alternative Minimum Tax.
- Lower the corporate income tax rate to 25%.
- Broaden the tax base to maintain revenue growth consistent with 18-19% GDP.
- Repeal the repatriation tax
The reforms are ambitious, but pretty standard fare for Republican tax plans these days.
But the problem with Ryan’s plan is that he doesn’t identify which income levels will pay which rates, which makes it impossible to figure out how the proposals would effect revenues. In an op-ed for the Wall Street Journal today, Ryan writes that revenue would “remain steady” because his plan would close special-interest loopholes. But the plan doesn’t specify what loopholes would be closed.
This lack of details obviously limits the viability of Ryan’s “tax reform” plan, and underscores the fact that the plan is, at its core, a political document that no one — including Republicans — ever expects to pass.
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