Ryan’s big lie

The Times-Tribune - - Editorial -

House Speaker Paul Ryan hasn’t been able to con­vince many of his mem­bers, mostly from big East­ern states, that the tax bill he and Pres­i­dent Trump fa­vor would be a boon to the mid­dle class.

That didn’t stop him from ap­pear­ing Wed­nes­day at a right-wing think tank and re­peat­ing the lie at the heart of those mem­bers’ op­po­si­tion.

Ac­cord­ing to Ryan, the rest of the coun­try is “prop­ping up prof­li­gate, big-govern­ment states.” The ref­er­ence is to the fed­eral in­come tax de­duc­tions for mort­gage in­ter­est and state and lo­cal taxes, all of which Ryan’s plan would elim­i­nate. In states with per­sonal in­come taxes and lo­cal prop­erty taxes, elim­i­nat­ing the tar­geted de­duc­tions would cause chaos for state and lo­cal govern­ment, the hous­ing mar­ket and the econ­omy.

The the­ory is that the mort­gage in­ter­est de­duc­tion pri­mar­ily ben­e­fits more af­flu­ent peo­ple, and the lo­cal and state de­duc­tions en­able state and lo­cal gov­ern­ments to di­min­ish the im­pact of high state and lo­cal taxes.

The “prof­li­gate, big-govern­ment states” he’s re­fer­ring to, not co­in­ci­den­tally, are mostly ma­jor­ity-Demo­cratic states.

Ryan’s claim is a crock. The rest of the coun­try does not gen­er­ally pro­vide cover for high-tax states. New York State alone sent $48 bil­lion more to Wash­ing­ton last year than it re­ceived in all fed­eral funds, a re­turn of 81 cents for ev­ery dol­lar. New Jer­sey sent $31 bil­lion more than it re­ceived, a re­turn of 77 cents on the dol­lar. Cal­i­for­nia re­ceived $17 bil­lion less than it de­liv­ered, re­ceiv­ing 96 cents for ev­ery dol­lar sent. Penn­syl­va­nia re­ceives slightly more than res­i­dents pay in fed­eral taxes, due to the high av­er­age age and Med­i­caid ex­pan­sion un­der Oba­macare.

Ev­ery Penn­syl­va­nia Re­pub­li­can in Con­gress should re­ject the plan and point out to Ryan that most fed­er­ally de­pen­dent states tend to be low­tax, South­ern red states. Sup­pos­edly ruggedly in­de­pen­dent South Carolina, for ex­am­ple, gets back $7.87 for ev­ery tax dol­lar it sends to Wash­ing­ton, mak­ing it re­mark­able that it some­how can sub­si­dize New York.

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