Paul Ryan's tax plan would lower his (and Mitt Romney's) taxes
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Thread: Paul Ryan's tax plan would lower his (and Mitt Romney's) taxes

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    Community Host Alissa_Sal's Avatar
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    Default Paul Ryan's tax plan would lower his (and Mitt Romney's) taxes

    Paul Ryan Would Likely See Healthy Tax Cut Under His Tax Plan
    Paul Ryan's tax plan would have saved the presumptive Republican vice presidential candidate and his wife Janna about $7,100 in 2011 -- enough to knock their effective tax rate down from 20 percent to less than 18 percent, a calculation by The Huffington Post found.


    In 2011, Ryan and Janna paid $64,764 in taxes on income of $323,416, according to tax returns released Friday afternoon. If the tax code were rewritten as Ryan has proposed -- raising taxes for many lower-income taxpayers while reducing the tax burden for the wealthiest Americans, critics charge -- the family would owe $57,591 in taxes.


    Ryan released his tax filings, which also include his return for 2010, in the midst of a controversy over whether his would-be boss should make public more of his own tax returns. Last week, Mitt Romney, who has thus far released his 2010 return and an estimated return for 2011, told reporters that he paid no less than 13 percent of his income in taxes for the past decade, in an effort to defuse an issue that has threatened to overshadow his economic message.


    Romney pays a lower rate than most middle-class taxpayers because most of his income comes from investments, which are taxed at a lower rate than traditional income. If his running mate had his way, Romney would pay much less.


    Ryan's plan would eliminate taxes on capital gains, on dividend income and on interest income, and would also do away with the alternative minimum tax. It would then tax everyone at one of two rates -- 10 percent for joint filers with income under $100,000 a year; 25 percent for everyone else. The federal government would recoup some, but not all, of the lost revenue through the elimination of most deductions, including the popular mortgage interest deduction and the deduction for charitable giving.


    Ryan has said his plan would make the tax system flatter and simpler. Democrats have said killing the 15 percent capital gains tax would amount to a huge windfall to top earners. Romney, according to one estimate, would pay less than 1 percent of his income in taxes under the Ryan plan.


    The Ryans would benefit, too, but not nearly as much. That is because they land, income-wise, on the fulcrum between the middle class and the very wealthy. Their income comes mostly from two sources -- Paul Ryan's salary as a U.S. representative and investments inherited by Janna when her mother died in 2010.


    ?These are properties Rep. Ryan ?married into,? for lack of a better term,? Ryan spokesman Kevin Seifert told the Milwaukee Journal-Sentinel. ?He does not play an active role in them and has no plans to.?


    The investment earnings helped push the couple's income up to six-and-a-half times the median income of about $51,000 in 2011. (That puts them in the top 3 percent of all earners, but they are paupers in comparison to Romney and his wife Ann, who with an estimated income of nearly $21 million in 2011 earned 409 times the median household income -- more each day than most families made all year).


    The Ryans in 2011 benefited from $51,242 in deductions from mortgage interest, charitable giving and previous tax bills. While the couple would lose those deductions, their base income would also not be as high. That's because they would no longer be taxed on $50,550 from gains on the sale of stock, or on dividend and interest income earned from other investments. They would also benefit from an increased standard deduction: $25,000 as joint filers, plus $3,500 each for the couple and their three children.


    All told, their tax bill would drop by about 11 percent if the deductions were eliminated and they no longer had to claim investment income. Middle-class earners, in contrast, would see their tax bill rise sharply under the Ryan plan, according to a report published earlier this summer by the Joint Economic Committee of Congress, authored by Sen. Robert Casey Jr. (D-Pa.).


    The average annual tax burden for earners in the $50,000 to $100,000 range would climb $1,358. Taxpayers in the $100,000 to $200,000 range would owe $2,257. Meanwhile, those making more than $1 million a year would save, on average, $286,543.

    Earners in the Ryans' peer group, those who earn $200,000 to $500,000, would save on average $2,257, according to the Joint Economic Committee report.


    Rep. Kevin Brady (R-Texas), vice chairman of the committee, has disputed its findings, saying that the report used data from the nonpartisan Tax Policy Center, which defines income and taxes "significantly differently than the IRS data used elsewhere," according to ABC News.


    Ryan's tax plan as written, of course, is at a significant distance away from reality. Such a drastic restructuring would probably have a tough time getting through even a Republican-dominated Congress unscathed, and besides, Romney has his own ideas. Though short on detail, Romney's proposed rewrite of the tax code would cut rates by 20 percent for everyone, and also eliminate the estate tax, the alternative minimum tax and the capital gains tax for all but wealthy taxpayers, he has said.


    The nonpartisan Tax Policy Center found that in order for the tax plan to be revenue neutral, as Romney's advisers claim, it, too, would cause tax bills to rise for lower-income taxpayers -- a charge that Romney has vigorously disputed.


    In a recent interview with Brit Hume of Fox News, Ryan suggested that tax policy specifics would come after the election.


    "That is something that we think we should do in the light of day, through Congress," Ryan told Hume, promising to "have a process for tax reform so that we do this in the front of the public. ... [W]e want feedback from Americans about what priorities in the tax code should be kept, and what special interest loopholes we want to get rid of."
    I will be the first to admit that I don't really know how you would get around it (somebody has to do the voting, and we all pay taxes, so presumably there is always going to be room for voting in your own self interest there) but is it fair that pretty much only rich guys get to set the tax rates? I mean, it seems kind of like a no brainer that they would probably vote for stuff that would lower their own taxes, right? Fair or unfair? Do you think they are doing a good job of it? Discuss.
    -Alissa, mom to Tristan (5) and Reid (the baby!)

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    I have not read up on the tax plan, but for now I am going to say any tax plan is better than no tax plan. Over $57,000 a year in taxes is still a lot of money.

    As an aside, I can't seem to get excited about either candidate. I will propably vote for Romney, but I wish there was someone different.

    ~Bonita~

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    Ryan's current plan does not still have these tax cuts. Also Romney has said he does not support the cut to the capital gains tax, so it is really a moot point.

    If the Ryan tax plan of 2010 were still in play I would have to see the rest of the changes to see if I felt it balanced out before I could say whether or not I agreed.
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    So, the article inspired me, and we can debate this specific tax plan if you like, but my question is more "in general" and definitely not limited to the Republicans (as pretty much everyone in Congress is better off than your average American.) Is it fair to let one class of people make all of the decisions about the tax code, including their own tax rates? I mean, if only middle class people were in Congress, would taxes for the middle class be higher or lower?
    -Alissa, mom to Tristan (5) and Reid (the baby!)

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    Quote Originally Posted by mom3girls View Post
    Ryan's current plan does not still have these tax cuts. Also Romney has said he does not support the cut to the capital gains tax, so it is really a moot point.

    If the Ryan tax plan of 2010 were still in play I would have to see the rest of the changes to see if I felt it balanced out before I could say whether or not I agreed.
    I was trying to research what tax cuts have been removed since all of the articles I have seen on this are really recent (like within the past day or so. Just for my own education, can you point me to something that shows a more current plan? Thanks!
    -Alissa, mom to Tristan (5) and Reid (the baby!)

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    Quote Originally Posted by AlyssaEimers View Post
    I have not read up on the tax plan, but for now I am going to say any tax plan is better than no tax plan. Over $57,000 a year in taxes is still a lot of money.

    As an aside, I can't seem to get excited about either candidate. I will propably vote for Romney, but I wish there was someone different.
    it's a lot of money for me, but not so much for him. Once you reach a certain level, it doesn't hurt/you don't notice it as much. Right now I have to calculate how much gas I can use. Can I afford to make an extra trip 12 miles one way or do I need to wait until I need things at 4 of the stores there? I know how many hours I have to work to fill my tank while others in my communitity are calculating the number of hours they have to work for 1 gallon of gas. I don't think Romney is thinking about this. When you have to think about spending almost a week's worth of pay on gas, you're just not in the same place the Romney's are.

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    Mega Poster mom3girls's Avatar
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    Quote Originally Posted by Alissa_Sal View Post
    So, the article inspired me, and we can debate this specific tax plan if you like, but my question is more "in general" and definitely not limited to the Republicans (as pretty much everyone in Congress is better off than your average American.) Is it fair to let one class of people make all of the decisions about the tax code, including their own tax rates? I mean, if only middle class people were in Congress, would taxes for the middle class be higher or lower?
    I think that those that are in power, making decisions on their own tax rate, are "supposed" to be doing what is best for constituents not themselves. I do not believe that to be the truth, but I dont believe the choices they make are for themselves either. I think that 9 times out of 10 they make choices based on what they think will get them re-elected. Even if we put people from the middle class in office it would probably be the same. I am not sure what the answer to this issue is, term limits may or may not help.
    Lisa
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    Mega Poster mom3girls's Avatar
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    His current proposal is fairly vague, but it points to a systems with either a 25% or 10% tax rate, with everyone on in the country paying some taxes.
    Here is an article from ABC
    How Paul Ryan's Tax Plan Measures Up For Americans - ABC News
    Lisa
    Molly, Morgan, Mia and Carson

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    Community Host Alissa_Sal's Avatar
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    Quote Originally Posted by mom3girls View Post
    I think that those that are in power, making decisions on their own tax rate, are "supposed" to be doing what is best for constituents not themselves. I do not believe that to be the truth, but I dont believe the choices they make are for themselves either. I think that 9 times out of 10 they make choices based on what they think will get them re-elected. Even if we put people from the middle class in office it would probably be the same. I am not sure what the answer to this issue is, term limits may or may not help.
    I agree with this, but I think that the problem with it is "what will get them re-elected" seems to be "what will make the lobbyists give them enough campaign donations to get reelected. Which is typically lowering the tax rate for the richest people....
    -Alissa, mom to Tristan (5) and Reid (the baby!)

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    Community Host Alissa_Sal's Avatar
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    Your article didn't say that they are going to tax capital gains though. It said:

    Most of Romney's income is comprised of interest income, capital gains and dividends, which are not taxed under the plan Ryan first introduced in 2010.


    Ryan proposed two tax rates, 10 and 25 percent, instead of the current six.
    It doesn't mention that has changed since 2010. I'm just trying to understand, but I think the deal is that since the rich often make a ton of money through investments, if they were taxed a flat rate of 25% not including capital gains and the like, and we were taxed a flat rate of 10% but get rid of the deductions we usually get to claim, the rich would save tons, and we would pay more, which is also the only way to make this plan revenue neutral (which Ryan says it is.)
    -Alissa, mom to Tristan (5) and Reid (the baby!)

    Got an opinion? We've got a board! Come join us for some lively debate on the Face Off! Debate Arena board.

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