A couple things I don’t understand. Can the smart Freepers help me out?
Business income tax would raise $2.5 trillion per year?
Current corp income tax only raises about $300 or so billion now. Are there numbers to support the $2.5T?
Minor point: How is a tax based on net income a consumption tax?
I think the difference is that all businesses are not corporations, but the revenues in the Cruz plan come from all businesses including corporations at the same flat rate.
A transaction for goods or services must occur to create the revenue to be taxed.
In truth there are only two type of taxes, consumption and wealth. Property taxes would be an example of a wealth tax. The tax is bases solely on the value of an item.
Other taxes like payroll, medicare, income, sales, etc. only vary in the means of collection. The actual tax money collected comes from the sale of goods or services to the end user. Therefore they are all consumption taxes embedded in the end price of the good or service and collected upstream.
I have a question. If we are talking about having expenses which would need to be reportable, how can you get rid of the IRS?
I went to Ted Cruz web site and while there are a lot of words about the tax plan, I didn't see anything that describes how the $2.5 trillion will be raised. No numbers.
The current corporate tax is levied only on the corporations income, that is, profits.
Ted Cruz's VAT is levied on total revenue minus equipment and services purchased from other business, but not subtracting labor costs.
The 16% is lower than the current corporate income tax rate but is applied to a much larger revenue base.