2012 V.P. Debate: on Tax Reform

Paul Ryan: FactCheck: JFK cut rates by 20%, but from twice today's rate

RYAN: It is mathematically possible. It's been done before. It's precisely what we're proposing. It's been done a couple of times, actually. Jack Kennedy lowered tax rates, increased growth. Ronald Reagan, Republicans & Democrats have worked together on this.

THE FACTS: The top marginal tax rate in 1962 was 91% and JFK proposed lowering the top rate to 65% (compared to a top rate of 37% today). Yes, JFK did cut tax rates by more than 20%. But in the context of the much higher rates in 1962, cutting tax rates meant something very different than today--Ryan hence cannot realistically apply the lessons from JFK to today. No politician of any party today would even consider RAISING tax rates to the LOWER levels proposed by JFK in 1962!

Paul Ryan: OpEd: plenty of tax loopholes; but mostly for middle class

Biden lifted the veil on that one, pointing out that to even begin to get enough money to pay for tax cuts of the size the Republicans are talking about, you'd have to cut the mortgage interest deduction and you'd have to start counting employer paid health care as part of taxable income. The only people who wouldn't howl would be the really rich for whom these deductions are minor and the really poor who don't own houses or have employer paid health care.

Joe Biden: Millionaires pay more; middle class pays less

BIDEN: The middle class will pay less, and people making a million dollars or more will begin to contribute slightly more. Let me give you one concrete example: the continuation of the Bush tax cuts. We're arguing that the Bush tax cuts for the wealthy should be allowed to expire. $800 billion of that goes to people making a minimum of a million dollars. They're patriotic Americans; they're not asking for this continued tax cut; they're not suggesting it; but [the Republicans] are insisting on it. 120,000 families, by continuing that tax cut, will get an additional $500 billion in tax relief in the next 10 years, and their income is an average of $8 million. We want to extend permanently the middle-class tax cut. These guys won't allow us to. They're holding hostage the middle-class tax cut to the super wealthy.

RYAN: Our entire premise of these tax reform plans is to grow the economy and create jobs.

Joe Biden: Not mathematically possible to cut $5T in loopholes

BIDEN: You think these guys are going to go out there and cut those loopholes? The biggest loophole they take advantage of is the carried interest loophole and capital gains loophole. They exempt that. The only way you can find $5 trillion in loopholes is cut the mortgage deduction for middle-class people, cut the health care deduction for middle-class people, take away their ability to get a tax break to send their kids to college. That's why they [won't provide specifics].

Q: Is he wrong about that?

RYAN: He is wrong about that. You can cut tax rates by 20% and still preserve these important preferences for middle-class taxpayers.

BIDEN: Not mathematically possible.

RYAN: It is mathematically possible. It's been done before.

BIDEN: It has never been done before.

Paul Ryan: Tax cuts grow the economy and create jobs

BIDEN: The middle class will pay less, and people making a million dollars or more will begin to contribute slightly more. We want to extend permanently the Bush middle-class tax cut. These guys won't allow us to. They're holding hostage the middle-class tax cut to the super wealthy.

RYAN: Our entire premise of these tax reform plans is to grow the economy and create jobs. It's a plan that's estimated to create 7 million jobs. Now, we think that government taking 28% of a family and business' income is enough. President Obama thinks that the government ought to be able to take as much as 44.8% of a small business' income. Look, if you taxed every person in successful small business making over $250,000 at a hundred percent, it'd only run the government for 98 days. There aren't enough rich people and small businesses to tax to pay for all their spending.

Paul Ryan: 20% across-the-board tax cut via bipartisan negotiation

RYAN: Different than this administration, we actually want to have big bipartisan agreements.

Q: Do you have the specifics? Do you have the math?

RYAN: Look at what Ronald Reagan and Tip O'Neill did. They worked together out of a framework to lower tax rates and broaden the base, and they worked together to fix that. What we're saying is here's our framework: Lower tax rates 20%--we raise about $1.2 trillion through income taxes. We forgo about $1.1 trillion in loopholes and deductions. And so what we're saying is deny those loopholes and deductions to higher- income taxpayers so that more of their income is taxed, which has a broader base of taxation, so we can lower tax rates across the board.

BIDEN: I was there when Ronald Reagan tax breaks; he gave specifics of what he was going to cut.