CHOOSING YOUR TAX RATE…. The AP report on the new Republican alternative budget doesn’t even try to capture just how truly ridiculous it is, but there was one part of the article that caught my eye.
Despite spending reductions, the plan projects permanent deficits exceeding $500 billion into the future, fueled largely by big tax cuts.
The GOP plan would offer a dramatically simplified tax code in which couples would have the option of a 10 percent rate on the first $100,000 of income, with a 25 percent rate thereafter, with the first $25,000 of income exempt from taxation. Single could get a $12,500 exemption and a 10 percent rate on income up to $50,000.
Taxpayers could also opt to remain in the current system.
Right. If you like the tax system left by Bush/Cheney, you could choose to stick with it. Or, if you prefer the lower rates proposed by GOP lawmakers, you could choose to go that route, instead.
Of course, the current top rate, applied to the wealthiest Americans, is 35%. Republicans support a proposal that would let the rich choose between paying a 35% marginal rate or a 25% marginal rate. I wonder which one they’d choose?
But that’s not the funny part. The hilarious angle to this is that the House Republicans run enormous budget deficits while assuming the top earners would voluntarily pay the higher rate. Ryan Grim reports:
[T]he GOP budget permanently extends President Bush’s 2001 and 2003 tax cuts. A Republican budget committee aide said that the revenues assumed in the GOP budget are based on the current tax structure that resulted from those cuts.
In other words, Republicans are assuming that given the choice between a higher rate and a lower rate, Americans will choose the higher rate…. If taxpayers did decide to pay the lower rate, government revenue would plummet by roughly $300 billion per year, said economist Dean Baker of the liberal-leaning Center for Economic Policy Research.
Honestly, House Republicans were humiliated last week when it presented a budget without any numbers. Instead of quietly slinking away, these guys doubled down and started trying to fill in the gaps, which in turn makes them look even worse.
They should have quit while they were behind.