Top Democrat says GOP tax plan hurts the middle class

The top Democrat on the House Budget Committee says middle-income taxpayers would bear the burden of a tax overhaul under a Republican budget proposal released Tuesday. 

Rep. Chris Van Hollen (D-Md.) said a plan to simplify individual tax rates into two brackets — 25 percent and 10 percent — while lowering the top corporate tax rate to 25 percent and scrapping the Alternative Minimum Tax would "provide big tax breaks for folks at the highest end of the income ladder."

"People who end up shouldering the burden of that are middle-income taxpayers because they are going to end up being squeezed when you provide big tax breaks for the folks at the top," Van Hollen told Bloomberg Television on Tuesday morning.

House Budget Chairman Paul Ryan (R-Wis.) unveiled his election-year budget Tuesday morning that would cut $5.3 trillion in spending over the next 10 years compared with the White House plan. 

The plan to significantly cut taxes would reduce government revenue by $4 trillion over the next decade.

Yet it is difficult to pinpoint how Ryan's blueprint would reduce deficits because the plan lacks specific details on such as a breakdown of income levels within the new tax rates. The budget doesn’t include specifics on what tax breaks would be eliminated. 

"Everybody is for tax simplification, but the question is when tax simplification becomes code for providing tax breaks again for the folks at the very top and taking it out from other places in the budget, hitting programs that benefit seniors and other middle-income Americans — that is the question," Van Hollen said. 

Ryan's budget drops the level down to $1.028 trillion as part of a compromise with more conservative lawmakers in his party. 

Senate Budget Chairman Kent Conrad (D-N.D.) and Senate Appropriations Chairman Daniel Inouye (D-Hawaii) reiterated their plan on Tuesday to stick with the higher agreed-upon number. Senate appropriators have been working off that figure to determine the breakdown of the 12 spending bills for next year. The new fiscal year begins Oct. 1. 

"What the Republicans are doing here is trying to undo that agreement entirely because they want to provide these tax breaks at the end of the day," Van Hollen said. 

"Again, tax breaks that go to the folks at the very top end."

He said if taxes are cut across the board, a 25 percent rate for individuals is "providing millionaires with a disproportionately large tax cut." 

"Middle-income taxpayers are going to pay the burden not only in terms of increased taxes but also because they are going to get less support in the form of student loans — it is going to hurt our economy when it comes to less investment in infrastructure even though we have 13 percent unemployment in the construction industry," he said. 

"Those are very real negative consequences for most people in the country."