Coming Attractions: Rep. Paul Ryan Warns of a Top Marginal Tax Rate of 88%

Since the health care debate has swung into high gear, Republican Wisconsin congressman Rep. Paul Ryan stock has gone up as well, coming off as smart, intelligent and able to take the . He was Larry Kudlow’s CNBC program last night criticizing what health care reform would do to the deficit. But he said something else that really caught my ear. As he explained, based on projections from the so-called non-partisan Congressional Budget Office tax-rates will skyrocket with the wealthiest pay an astounding 88-percent rate within 30 years. [Transcript below video]

RYAN: Right now we’re at about 24.7 percent off, just doing that off the top of my head. This bill takes us to about … $2.4 trillion over the ten-year window when you really look at its true costs. That’s a big number on top of there. I think what this does is freezes in place the 25-percent level and then grow up from there. As you probably know with the current projections using CBO’s model shows us within about 20 years, we get to about 35 percent of GDP and in 30 years 40 percent and then take off like a rocket. So this just accelerates that trend where the government actually doubles in size by the time my three kids are my age.
KUDLOW: Doubles in size? Doubles in size.
RYAN: The government doubles in size as a share of GDP by the time my five, six and eight-year-old in my age. I actually had CBO run the numbers for me on the tax rates. Ten percent bracket for low income pairs go to 25 percent. Middle income to 63 percent and the top rate goes to 88 percent under the CBO scoring. We will kill our economy if this is the path we go down. That’s before you count this new health care entitlement on top of it. What we’re doing is creating a new entitlement saying anybody who makes less than 100 grand, if you consume more than 2 to 9.8 percent of health care expenses as a fraction of your income the taxpayer will pay the rest of it.

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03 2010

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