-Submitted by David Durmm (Nal), Guest Blogger
Although Rep. Paul Ryan (R-WI) had initially received praise for his budget proposal, upon more careful analysis, many, like Nobel laureate Paul Krugman, have found it to be Ludicrous and Cruel. A principal feature of his budget is tax cuts for the wealthy, from 35 percent to 25 percent. But not to worry, remember that tax cuts magically pay for themselves. Phase 1, cut taxes for the wealthy. Phase 2, ? Phase 3, prosperity.
Rep. Ryan’s budget relies on economic forecasts provided by the Heritage Foundation showing an unemployment rate of 2.8% by 2021. This seems like déjà vu all over again.
The Heritage Foundation also predicted massive economic gains from President George W. Bush’s tax cuts for the rich. The chart below show the Heritage predictions for employment in blue and the actual numbers in red.
The 2.8% prediction was so ludicrous and subject to so much ridicule, the figure vanished from the Heritage Foundation’s web site. Yet it is the Heritage Foundation’s model that Rep. Ryan cites as the analytical basis for his claims of job growth.
Ryan has been down this road before. In his “Roadmap For America’s Future”, Ryan proposed massive tax cuts for the rich. In a report from the Tax Policy Center, their analysis showed “[f]ederal revenues under the Roadmap would decline substantially as a percentage of GDP.”
To make up for lost federal revenues, tax increases for the middle class, through tax bracket “consolidation,” would be unavoidable.
H/T: Center for American Progress, Michael Linden, Matthew Yglesias.