Real Plans, Real Proposals

Hat tip to Arnold Kling .

Congress Paul Ryan has a new policy package up for others to see called America's Road Map

The PDF bullet point version here .

Interesting. I commend him on the effort. This isn't about vague generalities but quite specific.

As Ryan says:

It is a real plan, with real proposals, real numbers to back them, and real legislation to implement it. Based on the analysis of government actuaries, this plan is projected to make the Social Security and Medicare programs permanently solvent. It will lift the growing debt burden on future generations, and hold Federal taxes to 18.5% of GDP.

Let's have a look...

He highlights three major areas for policy changes:

1. Health and retirement security
2. National Debt Burden
3. Jobs and Competitiveness

Major Components:

1. Health Care

Ensures universal access to affordable health insurance by restructuring the tax
code, allowing all Americans to secure an affordable health plan that best suits their needs, and
shifts the ownership of health coverage away from the government and employers to individuals.

So far, so good. I like the general idea. Make it so everyone can buy it and individualize it. Your employment does not govern your insurance. It's YOURS. Like car insurance. Transparency measures are also included.

He proposes a tax credit of $2500 for individuals and $5000 for families. Insurance can be purchases from ANYWHERE. That is big change already. Currently, most insurance policies must be purchased in state and hurts competitive pricing and choice. The program also leaves more maximum flexibility to states to tailor to their needs.

For Medicare, it leaves the system alone for those over 55 and for the under 55 it follows the same pattern as regular health care but with a $9500 payment and additional help for lower income recipients (inflation adjustable) and it's also risk adjustable for greater assistance to higher risk people. It also establishes tax free medical savings accounts.

The key points here are choice, individual empowerment, transparency and solvency...which it accomplishes.

2. Social Security

Preserves system for those over 55.

for the under 55 it achieves real solvency and:

"Offers workers under 55 the option of investing over one third of their current Social
Security taxes into personal retirement accounts, similar to the Thrift Savings Plan
available to Federal employees. Includes a property right so they can pass on these assets
to their heirs, and a guarantee that total benefits from the personal accounts will not be
less than they would have been under the current system."

The changes seem subtle but it makes a big difference and with borrowing for transition costs. Details are a little murky here.

3. Tax reform

Eliminates AMT and offers tax payers a choice of paying through the existing system or a simplified, no deduction (minus health care credit) 2 rate system that anyone can fill out like a postcard.

"Simplified tax rates are 10% on income up to $100,000 for joint filers, and $50,000 for
single filers; and 25% on taxable income above these amounts. Also includes a generous
standard deduction and personal exemption (totaling $39,000 for a family of four)."

I like it. It speaks for itself. Flatter, simpler, much, much lower and has a generous deduction. An excellent improvement for everyone regardless of income.

It also eliminates taxes on interest, capital gains, and dividends; also
eliminates the death tax and replaces the corporate income tax with a "border-adjustable business consumption tax" of 8.5%. Not sure what that is but I like the lower rate. :)

This will do wonders for cutting into artificially tax inflated prices and distortions while leaving everyone from top to bottom a lot more money in their pocket.

That's an overview. I think it's pretty good. We'll see how it stands up to detailed vetting.

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