Several clients asked me this past week what the Paul Ryan tax proposal announced by House Republicans would mean.
To use a phrase the White House might find familiar: For many taxpayers, it might be just a big Nothingburger.
Ryan says a typical middle-class family could save around $1,200 in taxes. What he doesn’t say is that a family with four children could wind up with a larger tax bill instead of a tax cut. If you have significant deductions for state and local taxes (which would no longer be allowed), property taxes (which would cap out at $10,000), and medical expenses and charitable contributions, your taxes might be higher instead of lower.
Who will definitely benefit: Corporations, which could see their top tax rate slashed from 35% down to 20%, and the wealthiest families, as the estate tax (which now applies to fewer than 6,000 estates annually, or only two out of every 1,000 or so estates) is eliminated entirely–good news if you have a relative who is worth more than about $6 million. Nothingburger for everyone else.
John Cassidy of The New Yorker does a nice job of summarizing the current state of play here, and Jim Tankersley of The New York Times shows how 13 million taxpayers earning under $100,000 would get hit with a tax hike under the Republican proposal.