I thought so, too. But, if you look at Cruz's website, it says the business tax is simply (revenue - expenses) * 16%.
I think he is proposing eliminations of all kinds of other tax preferences in the corporate income tax regulations. But, it's still an "income tax", where income=revenue-expenses.
Here’s my reservation: it depends on the details. The more restrictions on deductions, the closer it is to a VAT. The more deductions allowed, the closer to an income tax.
But if it’s just an income tax, it’s probably not going to raise enough revenue to come close to revenue neutral, which, on a dynamic basis he claims to come close.
Will wages be deductible? Depreciation? How about treatment of proprietorships? S corps?
Lots of questions.
Seems to me, as a business owner, that the largest issue is to define what is and what isn’t a legit business expense. Just because a business pays for something with a business check doesn’t make it a legit business expense. IRS does it now through thousands of pages of regulations. Don’t see any difference between now and Cruz plan except for rate. Need to get the IRS and their interpreting what is and what isn’t out of the equation.