Paul Ryan has always been offended and even personally hurt by the implication that his tax plan would reduce the tax burden for the affluent. “It’s not true,” he has said, “This is nothing but scare tactics.” Ryan has always insisted he doesn’t want to cut taxes for the rich. He just wants to reform the tax code, eliminating loopholes and deductions — many of which benefit the rich! — to make things simpler: “What we’re saying is keep tax revenues where they are. We’re not talking about cutting taxes. We’re talking about keeping taxes where they are and cleaning up the tax code: getting rid of loopholes and deductions, which by the way are enjoyed by the top [tax] rate filers, the people in the top two brackets, and lowering tax rates. A flatter system, a fairer system, a simpler system, one that is more internationally competitive.” Cutting taxes for the rich? Why, that’s the furthest thing from his mind!
This claim was exposed repeatedly, but especially two years ago. What happened was that Dave Camp, the retiring Chairman of the House Ways and Means Committee and a heretofore reliable Republican, produced a tax reform that did what Ryan has always said he favors. It cut tax rates and cleaned out loopholes and deductions, but spread the benefits evenly, so that the rich did not come out ahead. Republicans fled en masse.
Ryan still favors tax reform, but refuses to specify how he would change the tax code. In a new interview, John Harwood pins him down:
HARWOOD: On taxes, your predecessor as Ways and Means chair, Dave Camp, when he came out with a comprehensive tax reform a few years ago, he adopted as a principle that it was going to be distributionally neutral. It wasn’t going to advantage any group over the current system. Is that still a principle that you think is appropriate for the Republican tax agenda?
RYAN: So I do not like the idea of buying into these distributional tables. What you’re talking about is what we call static distribution. It’s a ridiculous notion. What it presumes is life in the economy is some fixed pie, and it’s not going to change. And it’s really up to government to redistribute the slices more equitably. That is not how the world works. That’s now how life works. You can shrink or expand the economy, and what we want to maximize is economic growth and upward mobility so that everybody can get a bigger slice of the pie.
HARWOOD: And you’re not worried that those blue-collar Republican voters, who are voting in the primaries right now, are going to say, “Hey, wait a minute. You really taking care of people at the top more than you’re taking care of me.”
RYAN: I think most people don’t think, “John’s success comes at my expense.” Or, “My success comes at your expense.” People don’t think like that. People want to know the deck is fair. Bernie Sanders talks about that stuff. That’s not who we are.
So there you have it. Ryan has identified the source of his disagreement with Camp: His tax reform was distributionally neutral. In other words, Camp did the thing Ryan has always said he would do, which is reform the tax code without handing a windfall to the rich. A tax reform that’s distributionally neutral is one that Ryan categorically opposes. For Ryan, handing a windfall to the rich is the only reason to do tax reform.
