Republicans Push for Lower Tax Rates and Spending Cuts; Sun Rises in East
House Republicans released a budget proposal today that would consolidate the six current individual income tax brackets into only two— a 10% and a 25% bracket — while also reducing the top corporate rate to 25% and eliminating taxes on U.S. companies’ overseas profits.
The proposalis part of a larger election-year message signifying that Republicans — unlike their Democrat counterparts — have a plan to balance the federal budget in a way that does not necessitate tax increases.
As part of Congressman Paul Ryan’s plan, spending would be cut on Medicare, food stamps, college tuition grants, and other “safety net” programs. The plan would produce a 10-year deficit of only $3.13 trillion, less than half the deficit created by President Obama’s recently released budget.
Equally as predictable, Democrats’ panned the proposal as screwing the poor to finance tax cuts for the rich.
Either way, from a tax perspective the proposal is as meaningful as rearranging thedeck chairs on the Titanic, as neither side realistically expects the suggested reform to become law. Rather, the Republican plan isaimed towards establishing the party’s position on spending and taxes prior to the November election.
