Posted on 01/23/2016 4:20:32 AM PST by Cincinatus' Wife
Quote and link. It’s more informative.
If you don't care enough about his tax policy, and his other positions to go read them for yourself maybe you should just stay home on election day.
Everyone who is voting owes it to the rest of the country to at least know what the candidate they are voting for says they stand for.
BTW here's some infomation:
Jan 24, 2016: The Case for Ted Cruz
[SNIP]
".....Tax Reform.
The Cruz tax reform proposal would scrap the current income tax code entirely, and replace it with a Simple Flat Tax with the same 10% rate for all forms of individual income. That same 10% rate would apply to wages, profits, capital gains, dividends, rent, and interest income. No one would be able to claim that billionaires are paying lower tax rates than their secretaries, or that the system is rigged to favor the rich over the middle class.
The corporate income tax would be abolished as well, replaced with a 16% Net Business Tax. That would include immediate expensing, or deductions, for the costs of plant and equipment, and all other capital investment. That promotes investment in worker productivity, which is the foundation of rising wages, and in businesses providing good paying, blue collar jobs, like heavy industry, mining, energy, farming, ranching and manufacturing. But there would be no more corporate welfare, special interest, credits and deductions, or crony socialism, as under the current corporate income tax.
The 16% Business Flat Tax provides sufficient revenue to abolish the payroll tax altogether, with Social Security and Medicare financed in full from these two Cruz flat taxes, with no funding shortfalls. The payroll tax is the biggest tax working people and the middle class pay today, more than the income tax for the bottom 60% of income earners. That provides major tax relief for business as well, particularly the small and medium sized businesses that create most new jobs on net, since both the employer and employee payroll taxes initially come out of the cash flow of businesses.
Cruz's 10% flat tax for families includes a $10,000 standard deduction ($20,000 for couples filing jointly), and a personal exemption of $4,000. That means that the first $36,000 for a family of four is exempt from all significant federal taxes, with no payroll tax any longer. The plan retains the current Child Tax Credit, and increases the Earned Income Tax Credit by 20%, both favoring poor and lower income workers. This new system is consequently rigged to favor the poor and the middle class.
Each worker would also enjoy a Universal Savings Account, where any adult could save $25,000 a year with taxes deferred, like in an IRA, which could be used at any time for any purpose. Cruz's tax reform would also abolish the Death Tax and the Alternative Minimum Tax, as well as the Net Investment Income Tax of 3.8 percent and the Medicare surtax of 0.9 percent, both imposed by Obamacare.
Most families could file their income taxes on a postcard under this Simple Flat Tax, saving taxpayers hundreds of billions in tax compliance and collection costs each year. That means that "we can abolish the Internal Revenue Service as we know it," Cruz rightly argues.
The Tax Foundation scored Cruzs tax reform plan dynamically as increasing capital investment by 43.9%. That would create nearly 5 million new jobs, and grow wages by 12.2%. That would increase real economic growth over the next decade by nearly 14% more than under current tax policies. The after tax income of all workers would increase, by 21.3% on average. Those in the bottom 20% of income would also enjoy after tax income increases, gaining 15.3% on average.
Cruz's business tax would tax imports into the U.S., but exports would be tax free, just like a national sales tax would. That is why such a tax system is permissible under the General Agreement on Tariffs and Trade (GATT), which permits sales taxes. Most of America's trade partners have such a domestically favorable tax system. Cruz's business tax would especially favor American manufacturers, American exporters (including agricultural exporters), and even 100% service companies would be no worse off because the 16% business tax just replaces the 15.3% payroll tax, which again would be abolished. Moreover, the proposal sharply reduces, rather than grows government like a VAT, because it would abolish so many current taxes - the corporate income tax, the payroll tax, the death tax, the Alternative Minimum Tax, the 3.8% Net Investment Income Tax, and the Obamacare Medicare payroll tax increase add on of 0.9%.
Cruz's tax reform plan is not designed to be revenue neutral, because Cruz is running for President to make government smaller, not to raise the same taxes to pay for the same spending. The non-partisan Tax Foundation scores the reform dynamically as a tax cut of $768 billion over the first decade, which is manageable.
Spending Cuts and Balancing the Budget. Cruz has already proposed $500 billion in spending cuts over 10 years, with a plan abolishing four federal departments, plus the Internal Revenue Service, and 25 more named federal agencies. Those include the Departments of Energy, Commerce, Education (sent back to states in block grants), and HUD.
Cruz's budget plan includes sweeping entitlement reform. Cruz has been the indomitable leader in advancing the repeal and replacement of Obamacare. Gone would be the individual mandate, the job killing employer mandate, and all the other unnecessary regulation increasing the costs of health insurance and care. Costs would be further reduced through the market incentives of Health Savings Accounts, consumer choice, and competition. The poor would be better taken care of by block granting Medicaid back to the states, ultimately involving more Health Savings Accounts, consumer choice, and competition. So would coverage for pre-existing conditions. This would save the economy at least another trillion dollars each year.
The enormously successful 1996 welfare reforms can be expanded to all of the $1 trillion a year means tested welfare programs through further block grants to the states. States would have powerful new incentives to promote work for the able bodied particularly among the bottom 20% in income. That would further promote booming economic growth through tidal waves of new labor supply into the economy.
Cruz mentioned at the October debate that he would propose the freedom of each worker to choose a personal savings and investment account to finance future Social Security benefits. The Chief Actuary of Social Security scored a similar plan introduced by Paul Ryan in 2004 and 2005 as generating savings and investment by working people all across America of nearly $8 trillion over the first 15 years, and $16 trillion over 25 years. That would do more to reduce inequality of wealth than everything dreamed up by Hillary Clinton, Bernie Sanders and Elizabeth Warren put together. All that capital investment would create millions more jobs and higher wages, through increased economic growth.
Through a lifetime of savings and investment in those accounts, seniors would earn higher, not lower, benefits, multiples of what Social Security even promises let alone what it could pay. Each would be free to choose their own retirement age, with market incentives to delay it for even higher benefits. This alone would involve the largest reduction in government spending in world history, as Social Security benefits would be financed through private financial markets, rather than the federal budget through tax and spending redistribution.
Reform of Monetary Policy and the Fed. Cruz raised in the October debate as well fundamental reform of the Federal Reserve, to restrict its wild monetary policy discretion by firm rules holding its course to maintaining a stable dollar. He suggested a commission to determine whether that should include a link to gold. Such guaranteed dollar stability would further draw investment from across the entire globe, as investors would know they would be paid back in dollars as good as the dollars they invested. Indeed, as good as gold......"
[SNIP]
..even 100% service companies would be no worse off because the 16% business tax just replaces the 15.3% payroll tax, which again would be abolished.
Except that the 16% tax doesn't have a limit of around $100,000 that it applies to, so everybody ends up paying way more in taxes. Its a 16% VAT tax, and that kind of tax is far more expensive than the income taxes we have now.
Also, your cited article indicates that the employee payroll tax is abolished "The payroll tax is the biggest tax working people and the middle class pay today" but that's not true since the very same people will pay the 16% tax whenever they go to the store, since it will be built into the price of everything they buy.
Also, right now the payroll tax is split between the employer and the employee. Pushing the entire burden onto the employer will either cause the employer to have a new expense equal to 7.65 % of all employee compensation, meaning they need to raise prices, or they will have to cut salaries. In either case the same middle class people end up paying the bill - either your salary goes down or your costs at the store go up.
Regardless of what Sen. Cruz calls his tax it is a VAT tax, just like the ones in Europe. And it is a bad idea.
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