House Republicans issued their fiscal year 2012 budget plan, including a provision that would lower the top tax rates for individuals and corporations to 25 percent.
The proposals, issued in the report “The Path to Prosperity: Restoring America’s Promise,” calls for eliminating $800 billion in tax increases in the health care reform law by repealing the law, and preventing a $1.5 trillion tax increase in the president’s budget. It also endorses a “simpler, less burdensome tax code for households and small businesses.”
The plan, introduced by House Budget Committee Chairman Paul Ryan, R-Wis., would consolidate the number of tax brackets and cut the top rate from 35 to 25 percent.
“This budget would offset lower rates with a broader base, scaling back or eliminating entirely the deductions and credits that have skewed corporate behavior and benefitted the largest corporations disproportionately,” said the report. “Government should not be in the business of picking winners and losers in the market. A single low, fair and simple rate is as good for American businesses as it is for the individual Americans they employ.”
The budget plan aims to reduce budget deficits by $4.4 trillion over the next decade, cutting $6.2 trillion in spending. It would change Medicare into a “premium support model” under which future Medicare recipients would choose an insurance provider, and a payment would be provided to the plan chosen by the beneficiary, subsidizing its cost.
“The Ryan budget focuses on what matters most to families—jobs,” said House Ways and Means Committee Chairman Dave Camp. “Currently, we have a Tax Code that hinders instead of helps job creation. Simply put, the Tax Code is too costly, too complex and too burdensome for individuals, families and employers. We must focus on getting Washington out of the way so employers can do what they do best—innovate and create jobs – and that starts with comprehensive tax reform.”
Senate Finance Committee Chairman Max Baucus, D-Mont., warned that the Republican plan would impose deep cuts in Medicare, however. “Independent experts agree the House plan would make deep cuts to the Medicare benefits seniors count on,” said Baucus. “It would end Medicare as we know it and funnel Medicare dollars directly into private insurance companies’ pockets. Under the House plan, seniors’ coverage would be cut drastically, benefits would no longer be guaranteed and seniors’ costs would skyrocket. We can’t allow the House to balance the budget on the backs of seniors and we won’t—not on my watch.”
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