The Poor Get Poorer: How Ryan's Budgets Would Affect Ours

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http://www.theatlantic.com/business/archive/2012/08/the-poor-get-poorer-how-ryans-budgets-would-affect-ours/261043/





There are many different ways to talk about Paul Ryan's Roadmap, but maybe the most useful is to imagine how his budget affects your budget. How much more money would you keep under his broad tax plan? How much more would you have to save to pay for health care. And for the low-income, whom -- as we'll see -- bear the brunt of Ryan's cuts: How alone would they be in Ryan's America?

But let's start with a bit of basic arithmetic.

There are two basic ways that the government's budget can affect yours. Clearly, one is taxes. More than 80 percent of government revenues comes from individuals' wages and income. (The rest comes from corporate taxes and things like excise taxes on gasoline, which also affects our budgets, but less directly.) Two is spending. Although most of us might think of government as providing public goods like airports and security, $3 out of every $5 Washington spends is basically insurance -- a transfer to those who are old, sick, and poor. Social Security writes checks equal to 20% of government outlays. Medicare, Medicaid and CHIP account for another 20%. Safety net programs and benefits for veterans and federal retirees account for another 20%.

So, a full accounting of how Ryan's budget would affect your budget must consider how much he would cut our taxes and how much he would cut our transfers.

TAXES. Ryan cuts income tax rates and abolishes investment taxes to reduce government revenues by about $450 billion per year over the next ten years. (That's after he makes permanent the Bush/Obama tax cuts.)

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1. On the other hand, the revolution would come that much quicker.

France, 1789.