March 4, 2009
Wisconsin Congressman Urges Tax, Monetary and Entitlement Policy Reform
Paul Ryan (R-WI) Chides New Administration's Tax Increases on "Work, Savings, Investment, Capital and Risk-Taking;" Calls for Reductions in Income, Corporate and Capital Gains Taxes
Washington, DC, March 4, 2009 - On the heels of President Barack Obama's recent release of his fiscal year 2010 budget, Congressman Paul Ryan (R-WI 1st District), ranking Republican on the House Budget Committee, is pushing for major reform in the areas of tax, monetary and entitlement policy, criticizing the new administration's budget as having the practical effect of taxing "work, savings, investment, capital and risk-taking far more than we are today" and "hurting our chances of coming out of this recession robustly."
In a discussion with Tax Foundation Manager of Media Relations Matt Moon in this week's edition of the Tax Policy Podcast, Ryan proposes a two-tiered individual income tax system with the top marginal tax rate cut to 25% and the lower bracket cut to 10% for the first $100,000 for couples, as well as a cut in the corporate tax rate to 25%.
"Cutting the corporate tax rate would be a fairly modest reform, in my opinion, because that would basically keep us line with the average international tax rates for industrialized countries," says Ryan. "Those are the kind of things that I think we ought to do ... raising taxes on individuals, which raises taxes on small businesses, and taxing capital more is not going to help us get investment flowing in this country again."
Ryan also notes that the Federal Reserve's "easy-money policy" helped fuel the housing bubble that contributed to the current economic downturn, and calls for use of either an explicit, market-based price guide in setting monetary policy or something more politically palatable, like the use of inflation targeting by the Fed.
"We are on a real monetary policy roller coaster," Ryan argues, "and I think we need to bring a little more certainty, a little more predictability, to our monetary policy."
On Social Security and Medicare, Ryan proposes reforming these entitlements by having a defined benefit system for low-income and chronically ill people while also having an individually owned defined contribution system for the two programs.
"We want this century to be one where Americans have the highest standard of living, where we fulfill the obligations of retirement and health security in the country without bankrupting the country and cranking up the national debt on the next generation."
This Tax Policy Podcast can be found at http://www.taxfoundation.org/podcast/show/24419.html.
The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
