Exclusive interview: Paul Ryan talks tax reform

posted at 10:45 am on September 14, 2011 by Tina Korbe

Rep. Paul Ryan (R-Wis.) agrees with the president that we need to close a few loopholes in the tax code. But whereas President Obama frequently refers to tax breaks in the same breath as he disparages oil company executives and corporate jet owners, Ryan has just one goal in mind: to lower tax rates to grow the economy.

“We want to make the tax code more fair, more competitive, simpler — and lower tax rates on families, businesses and entrepreneurs so they can compete and create private sector jobs,” Ryan said yesterday in a phone interview. “The difference is, the president likes to invoke tax loopholes as part of his class warfare mantra usually to try to invoke fear, envy and anxiety as a motivator not as a means to lower tax rates to grow the economy.”

As the below video released today by the Budget Committee makes clear, Ryan’s proposals for tax reform are simple — and constitute an essential component of the plan the House passed earlier this year, what Ryan calls “the Path to Prosperity” and what everyone else refers to simply as “the Ryan plan.” But, even taken in isolation, apart from his proposals to cut spending and reform Medicare, Ryan’s ideas for tax reform could make an immediate difference for the U.S. economy and job creation.

“If you tax something more, you get less of it,” Ryan explained. “If you tax something less, you get more of it. If you tax work, savings, investment more, you’re going to get less of those things. If you lower tax rates across the board, we always see stronger economic growth result across the board. But more to the point, in the 21st century, we are now in a global tax competition. Capital is so much more mobile than it ever used to be and when we tax our employers, our manufacturers, our exporters, our job creators at rates that are much higher than our foreign competitors tax theirs, that’s when we lose. At this time, our tax rates are among the highest in the industrialized world and that’s putting us at a huge competitive disadvantage. We need to get our tax rates down so we can be more competitive.”

According to Ryan, the rest of the world knows this. They get it. In England, they’re in the process of lowering their tax rates on businesses and, in Canada, they’re lowering their tax rates to 15 percent. The U.S. has a corporate tax rate of 35 percent and, if the president has his wish, the top tax rate on competitive small businesses that file as individuals will go up to as high as 24 percent in 2013.

“That’s a recipe for disaster and it puts America at a very competitive disadvantage,” Ryan said. “It might make for good class warfare, but class warfare makes for very bad economics.”

Ryan’s ideas shouldn’t be controversial: History has borne them out time and again. And, in fact, his proposals do enjoy bipartisan support. (The Bowles-Simpson Commission called for closing loopholes to lower rates, for example). But you can bet there will also be objections.

Ryan explains why: “Congress has slipped into this comfortable mode by both political parties that they’ve enjoyed picking winners and losers. I call it crony capitalism or corporate welfare. It’s gotten out of control. You have protected industries, businesses that have been singled out for favors in the tax code. That necessarily comes at the expense of higher tax rates on everyone else. … It’s not fair and it makes businesses less competitive and it makes it harder for that entrepreneur, that person who has come up with an idea, to succeed and grow a business. We need to become a party that’s pro-market not just pro-business because pro-business can easily become confused with crony capitalism and we can’t be confused about this point. We need to become pro-market so we have the conditions for economic growth, so the new budding entrepreneurs that we’ve never even heard of yet have an easier time getting funding for their ideas and growing their businesses and competing in the world economy.”

The controversy might also come from companies who have designed their business plans around tax loopholes — but others will appreciate the lower rates.

“I think some industries especially the renewable industry feel that they [couldn't] survive if not for these tax subsidies,” Ryan said. “Those that have organized their business plans more acutely around tax loopholes don’t want to see any change to the status quo and therefore they come and lobby against the status quo being changed. Those that can handle the tradeoff of losing a loophole in exchange for getting a lower, more competitive tax rate are willing to make that tradeoff.”

And, of course, many House-approved Republican proposals eventually stall in the Senate. That, too, could trip up meaningful tax reform.

“It would take a Senate willing to legislate and do something,” Ryan said. “We haven’t had that for a while. The Senate hasn’t passed a budget in two years. … And you have to actually have a president who is willing to show leadership on these things.”

But Ryan sees an opening — at least on the corporate side of the tax code.

“The president, in his speech, to his credit, did have a sentence dedicated to corporate tax reform and it appeared to me that he was open to closing loopholes to lower tax rates on corporations,” the Budget Chairman said. “Whether he’s willing to do that on the individual side of the tax code remains to be seen given that I think he’s fully inclined to play class warfare and that he’s calling for higher tax rates in 2013 on individuals as part of his plan to pay for his second round of stimulus spending.”

But Ryan won’t stop hammering ideas that work — because, he says, that’s his job.

“It is our job to lead. It is our job to offer up ideas and to present solutions that we know will actually grow the economy and create jobs. Another round of stimulus spending I think would get the same kind of results the last round of stimulus spending got, which is more debt and fewer jobs. These ideas — closing loopholes to lower tax rates — are ideas that have proven time and again to work to create jobs and economic prosperity and we owe it to our constituents to be offering solutions even if our partners on the other side of the aisle don’t seem to be willing to participate.”


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Dammit, Jim, he’s a Representative not a candidate. Unfortunately.

lorien1973 on September 14, 2011 at 10:53 AM

Can we have a Ryan/Rubio ticket already?

jhffmn on September 14, 2011 at 10:56 AM

Ryan FTW!

Good Lt on September 14, 2011 at 10:58 AM

He will make a great President someday… Hopefully in 2020…

Khun Joe on September 14, 2011 at 11:00 AM

These videos by the Budget Committee with Ryan are extremely well done, and Ryan is very effective in both his content and delivery. Keep ‘em coming.

Weight of Glory on September 14, 2011 at 11:03 AM

He will make a great President someday… Hopefully in 2020…

Khun Joe on September 14, 2011 at 11:00 AM

If there is anything left in 2020.

portlandon on September 14, 2011 at 11:07 AM

The lawyers and accountants would never allow it.

NickelAndDime on September 14, 2011 at 11:09 AM

Dammit, Jim, he’s a Representative not a candidate. Unfortunately.

lorien1973 on September 14, 2011 at 10:53 AM

Don’t remind me. :(

Man, I’d vote for Paul Ryan in a heartbeat. I still don’t think he could win the primary, but dammit, I would vote for him. I sure hope I get a chance to some time in the future.

Caiwyn on September 14, 2011 at 11:13 AM

Christie/Ryan.

If not, make him Speaker of the House.

cpaulus on September 14, 2011 at 11:17 AM

I am unclear on something here. Who performed the “exclusive” interview? You Tina? If so you need your opening paragraph to be the setup for the interview itself.

NotCoach on September 14, 2011 at 11:18 AM

Paul Ryan is great and all, but it’s been more than 12 hours since our last Rick Perry post. I think I am starting to show symptoms of withdrawal here.

bitsy on September 14, 2011 at 11:19 AM

He will make a great President someday…
Khun Joe on September 14, 2011 at 11:00 AM

Why? Because he’s fluent on the nuances of tax code to stimulate an economy?

Is this what we expect and require in a president in this woebegone time?

rrpjr on September 14, 2011 at 11:19 AM

It would take a Palin landslide to make this happen. Fingers still crossed.

ElectricPhase on September 14, 2011 at 11:19 AM

It is our job to lead.

He’s got to be among the two or three people in government who believe that, because it sure as the dickens isn’t the “prevailing wisdom” in DC.

oldleprechaun on September 14, 2011 at 11:23 AM

rrpjr on September 14, 2011 at 11:19 AM

As opposed to the current one that doesn’t know jack-sh!t? It couldn’t hurt.

Cindy Munford on September 14, 2011 at 11:24 AM

I really wish more “Representatives” would pay attention to Paul Ryan, and emulate his forthright, honest approach to representing.

KMC1 on September 14, 2011 at 11:29 AM

Like the tax code, this needs to be simplified.

Ryan is one bright dude… but too bright IMHO for his message to carry over to any effective voting audience.

And while brilliant, who exactly is going to see this – and how will it be parsed for the masses of asses in America?

Odie1941 on September 14, 2011 at 11:30 AM

My goodness! Watch the longer video after the first video. He is interviewed by CNBC and he is outstanding! At one point he made the 4 interviewers speechless because of his forthright answers!

Vince on September 14, 2011 at 11:38 AM

I am unclear on something here. Who performed the “exclusive” interview? You Tina? If so you need your opening paragraph to be the setup for the interview itself.

NotCoach on September 14, 2011 at 11:18 AM

See the second video with CNBC.

Vince on September 14, 2011 at 11:39 AM

See this

Vince on September 14, 2011 at 11:48 AM

Sure, fine. I agree wholeheartedly with Ryan.

I say that because I neither want to disparage his arguments or downplay the benefits. BUT!

Here is the but. Let’s use Solyndra as an example, just because the numbers are fresh and available. There was an analysis noting their problem was it cost Solyndra $6/unit, selling it below cost for $3/unit in a market where the going price was $1.50/unit.

So my question is, what impact would proposing tax policy changes have on those numbers, especially wrt the $3 vs $1.5 spread?

Maybe they (tax policy changes) are more significant than I expect, though I think the bigger obstruction to creating jobs is regulation, and that ought to as big a talking point as tax policy and spending. I have a sneaking suspicion that changes in tax policy are not going increase the more of oil production related jobs as relaxing regulation on oil development would.

Dusty on September 14, 2011 at 11:49 AM

Why is there no candidate running on this stuff?

cpaulus on September 14, 2011 at 11:58 AM

Why? Because he’s fluent on the nuances of tax code to stimulate an economy?

Is this what we expect and require in a president in this woebegone time?

rrpjr on September 14, 2011 at 11:19 AM

It’s not just that … it’s … well, dammit, just check out the pants crease! It’s of presidential quality, let me tell you and I know!

– David Brooks

PackerBronco on September 14, 2011 at 11:59 AM

So my question is, what impact would proposing tax policy changes have on those numbers, especially wrt the $3 vs $1.5 spread?

Maybe we would stop wasting money on green technology that isn’t competitive?

PackerBronco on September 14, 2011 at 12:00 PM

And business expensing entertainment needs to end as well. This so-called ‘cost of doing business’ primarily exists BECAUSE of tax breaks for it. This will have a crushing impact of professional sports, but tough; it’s time to end this government subsidy to millionaires.

This also needs to apply to individuals; for example, the mortgage interest deduction needs to be scrapped (and a lower tax rate applied). Both businesses and individuals need to spend on what makes economic sense, unfettered by government pushing winners and losers.

michaelo on September 14, 2011 at 12:02 PM

Vince on September 14, 2011 at 11:48 AM

Video not available.

NotCoach on September 14, 2011 at 12:11 PM

Maybe we would stop wasting money on green technology that isn’t competitive?

[PackerBronco on September 14, 2011 at 12:00 PM]

Sure, but that is irrelevant to the question I posed since the three numbers would not change an iota whether there was a government loan or not.

Another thing, and I don’t know that Solyndra’s tech was in some way intrinsically more expensive than the market alternatives (maybe it is), but it seems that most manufacturing in that market is foreign and those goods imported, so your point about it not being competitive is mostly that America is not competitive. Which is more significant to that, tax policy or regulation?

Dusty on September 14, 2011 at 12:11 PM

Video not available.

NotCoach on September 14, 2011 at 12:11 PM

Yeah, I know. You’ll have to watch the first video above and then click on the 9 minute interview with him as that is the next video up.

Vince on September 14, 2011 at 12:18 PM

Just because Ryan is great at explaining economic ideas, doesn’t mean he’d be a great president. Like Obama, he has no executive experience, no foreign policy experience, etc. We don’t need another newbie in the White House.

Let him do a stint as governor, THEN we can talk POTUS.

Rubio is also great, but is also new and needs some experience.

Common Sense on September 14, 2011 at 12:24 PM

One more thing, Ryan voted for TARP, so his economic creds are a little tarnished.

Common Sense on September 14, 2011 at 12:24 PM

Great video! It is Fair, Competitive and Simple.

Email a link to Rep. Paul Ryan’s video to your Congressional Representative and your Senators! Maybe some of them will learn from it!

http://www.youtube.com/watch?feature=player_embedded&v=2Aewj_IndN4

wren on September 14, 2011 at 2:32 PM

“Just because Ryan is great at explaining economic ideas, doesn’t mean he’d be a great president.”

He’d be better than the current neo-Marxist we have.

The end.

rvastar on September 14, 2011 at 2:36 PM

There he goes making sense again. The man has no shame.

Yakko77 on September 14, 2011 at 7:17 PM

Simplify the tax code, and you make tax enforcement easier. Still, we do need greater tax enforcement to help chase down cheats, both rich and not so rich.

NorthernCross on September 30, 2011 at 7:18 PM