Rep. Paul Ryan blasted the Democrats' plan to raise taxes on millionaires and said he feared the U.S. economy could collapse into a European-style debt crisis.
"The arithmetic just doesn't add up," he said of the new proposal to slap surtax of five percent on income of more than $1 million to pay for the president's $450 billion jobs plan. Ryan said that Washington politics is preying on people's fears and that Congress focus on reducing corporate welfare rather than raising taxes on the rich. In the interview at the Washington Ideas Forum with David Leonhardt of the New York Times, he plugged his long-term deficit plan, which cuts taxes and spending and proposes dramatic changes to Medicare and Social Security.
The first step toward comprehensive entitlement reform, Ryan said, was to do away with loopholes in the corporate tax code to pay for lowering the rate. "I really think there's a shot at bipartisanship on the corporate [tax reform] side," he said. "Both parties have made a mess of the system."
Leonhardt questioned the idea that lowering taxes was a panacea for growth. Taxes increases didn't prevent growth in the 1990s, he said, and tax cuts produced disappointing growth in the 2000s. Ryan responded that "growth occurs on the margin" and when you raise taxes on work, savings, and investment, you get less work, less savings, and less investment -- and less growth. In the 1990s, Ryan added, other factors such as stable interest rates and a productivity boom helped to compensate for higher tax rates on income and capital.
The session's longest exchange on was about health care reform. Ryan has proposed a free market plan that would repeal Obama's law, decouple the health insurance tax benefit from employer, and make a tax benefit portable for every worker. Ryan said he supported universal coverage without a single payer that used the tax code to encourage people to buy insurance.
"I think [the Supreme Court] will knock down the [individual] mandate," Ryan said, without which the health care law will "death spiral."
Despite pleas for Ryan to run for president, the representative said he declined because, "I love being a policy maker. I don't have this burning desire. We like our life. I didn't have it in the gut."