To the Journal Editor:
In 2009 and 2010, Republican Congressman Paul Ryan of Wisconsin introduced sweeping legislation titled "Roadmap for America's Future." Among this bill's provisions are overhauls of U.S. health care and the federal tax system.
Ryan's plan shifts medical coverage away from employers by providing individuals and families annual tax credits of $2,300 and $5,700, respectively, to buy health insurance. Medicare would be phased out, replaced by annual vouchers averaging $11,000 for the purchase of private health insurance.
Tax-wise, Ryan's bill establishes two flat tax rates: 10 percent on income up to $100,000 for joint filers, and 25 percent on income above that amount. In addition, an 8.5 percent VAT, or national sales, tax would be levied. Federal income taxes on corporate profits, however, would be abolished, as would taxes on capital gains and dividends.
Ryan's bill massively shifts the tax burden from upper to lower income brackets. Though a VAT is probably needed, sales taxes are regressive, hitting the poor harder than the rich. Abolishing capital gains and corporate taxes, however, would primarily benefit the wealthy. The bulk of the income of tycoons like Bill Gates consists of capital gains; they would thus owe no tax on the majority of their huge earnings. Rich corporations would owe no tax on windfall profits. Yet the average Joe/Jane would owe tax on every taxable cent they make.
Corporations don't need permanent federal welfare and should pay their fair share to support the infrastructures that enable them to do business. And even with capital gains taxes, stocks greatly outperform money stashed in a box; people will invest regardless of the tax.
Ryan's proposed medical benefits are inadequate. He provides an annual tax credit of $5,700/family, but an average family health insurance policy costs $13,125/year.
Medicare privatization would trade Medicare's 3 percent administrative cost for the 20 percent administrative cost typical of private insurance. Eleven thousand dollars a year would buy little coverage for 80-year-olds. And Ryan admits that his vouchers for the elderly would lose value in the face of medical inflation.
Three quarters of House Republicans voted for Ryan's bill in 2009; Republican congressional candidate Dan Benishek should state forthrightly whether or not he supports it. If he says yes or equivocates, don't vote for him. This district has a history of electing pragmatic centrists rather than extreme ideologies of either the left or right.
Craig L. Teed