Paul Ryan -- near retirement? -- on the Truth-O-Meter
On Dec. 14, 2017, Politico reported that U.S. House Speaker Paul Ryan would like to "serve through Election Day 2018 and retire ahead of the next Congress," although a Ryan spokeswoman called the article "pure speculation."
The report came as the House and Senate were reportedly near agreement on a final tax reform bill, a major priority of Ryan’s.
Here’s a look at the Wisconsin Republican’s most recent statements that have been rated on the Truth-O-Meter -- all about tax reform or taxes generally.
Under the House Republican tax plan, in Wisconsin, "the median household of four gets about a $2,000 tax cut, on average."
That’s true if the typical household Ryan describes claims a standard deduction on their taxes rather than itemizing deductions. The savings would be $2,081 -- in 2018. But many Wisconsin households at that income level would see a savings of several hundred dollars less because they would no longer be able to claim deductions such as one for medical expenses, which the House bill eliminates. Moreover, because of the way the House bill is written, even the household that saves $2,081 in 2018 would see that savings drop in each year, down to an estimated $767 in 2027.
"With this plan, the typical family of four will save $1,182 a year on their taxes."
This is based on a plausible and transparent calculation, but Ryan glosses over some context. The calculation doesn’t factor in several itemized deductions that would disappear under the proposal and that could have a significant impact on at least some "typical" families around that income level. And Ryan’s statement is misleading when he says the family will save "$1,182 a year," since that’s the case in the first year only; after that, the benefit starts to shrink and eventually turns into a tax hike.
The Republican tax reform proposal is focused on tax breaks for the middle class "and not about people who are really high-income earners getting a tax break."
This statement was made in September 2017, when only a framework of tax reform had been released. Missing details in the framework for the tax reform made it difficult to tease out exactly how various taxpayers would fare, so it’s possible, we found, that there will be more for middle-class taxpayers. But based on the framework, while there were some benefits for the middle class, what was more clear was there were specific provisions benefiting the wealthy.
"We've got about $3 trillion in trapped cash overseas that basically can't come back in this country because of our tax laws."
To avoid a 35 percent U.S. tax, U.S.-based multinational companies have opted not to "repatriate" roughly $3 trillion of their foreign profits, a figure that is growing. That is, they don’t bring the money back to their U.S. headquarters, where it can be used for things such as dividend payments or investments in their domestic operations. But the overseas profits aren’t literally trapped and indeed some foreign-earned profits are repatriated, though they are subject to the 35 percent tax.
Says Aaron Rodgers "is not the highest tax rate payer" in Wisconsin, it's "the single mom getting 24 grand in benefits with two kids who will lose 80 cents on the dollar if she goes and takes a job."
There’s some mixing of apples and oranges here. The reference to Rodgers is for the actual highest rate he would pay for income taxes. With regard to the single mother, Ryan is referring to her marginal tax rate -- how much in public benefits she would lose by taking a job. Ryan is correct that it’s possible for the woman he describes to lose 80 cents in benefits for every $1 in income earned -- an 80 percent marginal tax rate. But that occurs in very rare cases where the mother would be receiving a higher than typical set of public benefits and would take a job within a narrow income range above the poverty level. The vast majority of lower income people aren’t hit with a marginal tax rate as high as 80 percent, although even lower rates are considered strong disincentives to work. And advocates for the poor say the unemployed generally are better off financially by taking a job, even if they lose some public assistance.