Ryan Plan Could Give $400,000 Tax Cut to Top Earners
CNBC Reporter & Editor
It's a little early to judge the full impact of the new House budget plan offered by Paul Ryan. While the plan details the taxes it would cut, it doesn't detail the taxes it would increase to keep revenues the same.
But a new analysis shows that the Ryan plan (at least the part that's been announced) would cut taxes for just about everyone, with the top earners getting the biggest tax cuts.
According to an analysis by the non-partisan Tax Policy Center, overall taxes would fall by an average of $3,000 per taxpayer, raising after-tax incomes by five percent.
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The top one percent of earners – those households making more than $575,000 – would see their taxes fall by an average of $225,000. Those making $1 million or more a year would see an average tax cut of $408,000 a year.
Households making $50,000 to $75,000 would see their taxes cut by around $1,100 a year.
Of course, we don't know what taxes would be increased to offset the plan's proposals. The house budget would repeal the Alternative Minimum Tax, enact ordinary income tax rates of 10 percent and 25 percent, repeal the 2010 health-care reform and reduce the corporate tax rate to 25 percent.
In total the changes would reduce revenues by $5.7 trillion over 10 years – an amount that would have to be made up in other tax increases to remain "revenue neutral," or to not add to the deficit.
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"The changes specified in the budget would reduce revenues by nearly $6 trillion over 10 years," said Roberton Williams of The Tax Policy Center. "That's a big revenue hole that has to be picked up somewhere else."
A Ryan spokesman could not immediately be reached for comment.