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Ryan vs. Romney on taxes

August 11, 2012

It’s been a political love fest today as Republican presidential hopeful Mitt Romney announced that Rep. Paul Ryan is his running mate.

Mitt Romney Paul Ryan August 11 2012 courtesy Romney-Ryan 2012 Campaign Quick pairing clarification: Calm down jubilant conservatives. Ryan will be the vice president, VP, veep, not the Oval Office occupant, if the Romney-Ryan ticket wins the coming election. Today’s “next president” misspeak by Romney was no more significant than the similar gaffe committed by Barack Obama when he revealed Joe Biden as the next president vice president back in 2008.

Romney’s verbal misstep aside, spirits are high among the Grand Old Party. Ryan is young, articulate, has shown a willingness to go head-to-head with opponents and, as noted, more politically acceptable to the Republican party’s right wing base.

But there’s also a significant amount of love of the Ryan choice on the Democratic side, primarily because the Wisconsin Republican has long argued for changes that would essentially eliminate Medicaid and Medicare and substantially change Social Security.

Those programs are core to the Democratic platform. And Ryan’s proposed changes weren’t as popular as he or his party had hoped.

You can, however, count on them soon being resurrected, just not legislatively. The Ryan plans will appear prominently in Obama campaign ads.

Tax ideas, too: Ryan also has some ideas about taxes, refined in his capacity as chairman of the House Budget Committee and member of the tax-writing Ways and Means Committee.

In fact, many of the Ryan proposals were included in the tax bill that the House approved before heading out for the August recess district work session.

And the new presumptive GOP veep’s revenue proposals differ not only from the Democrats’ positions, but also a bit from Romney’s proposed tax law tweaks.

The table below highlights the Romney vs. Ryan tax plans.

Tax Romney Ryan
Individual income tax rates Reduce all current tax rates by 20 percent, creating six rates of 8 percent, 12 percent, 20 percent, 22.4 percent, 26.4 percent and 28 percent 10 percent rate on income up to $50,000 for single filers and $100,000 for joint filers; 25 percent on taxable income above these amounts. Eliminate most tax deductions, credits and exclusions but increase the standard deduction and personal exemption amounts. Taxpayers also would have the option to use existing tax laws if that provided a better filing result.
Corporate taxes 25 percent U.S. tax rate and for multinational corporations a territorial system where taxes basically would be collected only by the countries in which the money was made Replace corporate income tax with a border-adjustable business consumption tax of 8.5 percent
Investment taxes No tax on any investment income for individuals with adjusted gross income of less than $200,000; 15 percent tax on interest, dividends and capital gains for individuals making $200,000 or more No taxes on any investment earnings regardless of taxpayer’s income
Alternative minimum tax (AMT) Repeal Repeal
Estate tax Repeal Repeal

Ultimately, though, both the Ryan and Romney tax plans would provide substantially bigger tax savings for the wealthy than would the Obama plan.

Initial word from the Romney camp is that presidential wannabe is not planning to embrace either Ryan’s Medicare or tax plans in the push for the White House.

But things could change as we near the Nov. 6 election day, so stay tuned.

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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