Fred's Focus: Pushing Consistently Bad Policies


Fred's Focus: Pushing Consistently Bad Policies

The economy and now taxes- House Speaker Paul Ryan is nothing if not consistent.

Consistent on producing terrible, recreations of failed policies, that is. There is nothing creative, new, or substantive in any of his proposals. They all return to the tired policies of the past-- block state grants designed to fight poverty, remove regulations in business to stimulate the economy, and now in his tax plan, dramatically cutting the nominal tax rate for corporations and high income individuals.

Ryan is the reigning champion of what has been called “market triumphalism,”  the belief that the key to a national prosperity is to remove any and all fetters on the market place. Chasing conservative philosophies has earned him much respect amongst the extreme right. According to Jane Meyer in Dark Money, he was the Koch brothers first choice for president in 2012. And it is no surprise when reading through his policies:

  • No regulations & the lowest possible taxes;
  • The private sector can do no wrong & the government can do nothing right; and of course,
  • People are poor because of their own weaknesses & the masters of the land will lead us into the light.

Ayn Rand has been cited as an intellectual mentor to Paul Ryan. Rand believed in this market triumphalism. A corollary to this doctrine is that theory, not historical reality, rules all. The facts do not matter. Thus people like Ryan ignore the success of the war on poverty; they ignore the multiple bank blow ups since the 1980s loosening of restrictions and of course the 2008 recession.

In his report on taxes, Ryan says what we expected him to say. He wants to consolidate the individual tax rate into three categories with the top bracket falling from 39.6% to 33%. He wants to drop the corporate tax rate from 35% to 20%. Nothing new here of course, but he does continue to consolidate the myths the far right promote about the economy.

In talking about the top tax rates, for instance, Ryan expects us to believe that high income people and corporations really pay these rates. They don't. A government study in 2012 showed the average corporate rate that was actually paid was 12%, not the nominal 35% rate. Many corporations have been able to avoid any taxes at all for years at a time.

Corporations have outspent unions by about 60 to 1 for political lobbying for at least 20 years. They have unparalleled political power. In 1952, American corporations paid 32% of all federal tax revenue. Today, they pay 10%. And Paul Ryan wants to cut it even more.

In his study of American taxes, We Are Better Than This, Edward D. Kleinbard, former Chief of Staff of the U.S. Congress Joint Committee on Taxation, compares US tax rates with the other 33 advanced nations in the OECD.

Kleinbard does a careful, data driven analysis. His conclusions are that the US has, in comparison to other industrial nations,a very low tax rate. Also, he finds that our tax rates are not sufficient to pay for legitimate American goods and services. He shows how the lack of an adequate tax base puts America at the bottom of all OECD nations in such vital areas as education and health.

And those high income individuals? The carried interest loophole and other deductions give most of them an effective tax rate in the high teens, not 39.6%. Let's not forget Mitt Romney so quickly.

It has been less than two decades since Republicans took the Democratic surplus of the 1990s and squandered it on an elective war and more tax breaks for the rich. President George W. Bush and his fellow Republicans said the tax cuts would create jobs. Bush of course, even without the devastation of the recession, had the worse job creation record of any president in decades.

But Paul Ryan, true to his allegiance to failed theories, calls for more tax cuts.

What was it Albert Einstein said was the definition of a lunatic?

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Patriotic Millionaire Fred Rotondaro has had a varied career that includes journalism, teaching, anti-poverty and civil rights work, and national association management. He was a senior fellow from 2003 to 2015 at the Center for American Progress where he concentrated on poverty and inequality. He has written extensively for academic and popular publications. He holds a PhD in American Studies from New York University, an honorary doctorate from Wheeling College, and is currently Chair of the Board of Catholics in Alliance for the Common Good.

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