Posted on 10/30/2015 2:58:54 PM PDT by springwater13
The Tax Foundation, which Cruz cited in the debate, spells out the terms: “Senator Cruz’s (R-TX) tax plan would enact a 10 percent flat tax on individual income and replace the corporate income tax and all payroll taxes with a 16 percent ‘Business Transfer Tax,’ or subtraction method value-added tax. In addition, his plan would repeal a number of complex features of the current tax code.†The plan repeals the estate and gift tax and the payroll tax. The income tax cut is substantial ($3.6 trillion) with a static model but all but $786B is made up in a dynamic scoring which also includes what in effect is a VAT tax. (Cruz does not specify spending cuts to make up the difference.) The income tax is not a pure flat tax since it retains a number of deductions and credits (home mortgage and charitable deduction, child tax credit, etc.) and familiar exclusions from income (e.g. employer provided healthcare insurance).
(Excerpt) Read more at washingtonpost.com ...
We need a plan that eliminates the IRS and lets me go around firing IRS agents so that I can see them driven before and hear the laments of their women.
My taxes would go down significantly. I’m for any plan that lowers taxes and simplifies the tax code.
Be wary of a flat tax. Go for the nrst. NO income tax of any kind is the goal.
No doubt both the flat (i.e., income) tax and the VAT will start relatively low. The problem is that they will both creep up, and in a decade or two, we’ll be paying European tax rates. It’s better to have one or the other, but if you have both...you will pay, and BIG TIME.
No VAT under any circumstances. Look at the European experience—it’s a license to steal at every level of production. it would be a nightmare.
Efficiency in revenue raising is one thing... but the big dog is reducing spending, IMHO.
No VATs! No way. No how. Period.
Which is just as important as the tax cuts, and I'm looking forward to Senator Cruz presenting his plan for them.
The taxes for about half the country would go up. Selling this to them is the trick.
I guess you mean the half that currently pays no taxes. The first $36,000 for a family of four would be exempt from taxation and a lot of the deductions remain in place. I don’t think anyone should get a free ride.
http://taxfoundation.org/blog/ted-cruz-s-business-flat-tax-primer
It’s not a sales or consumption tax on business. It’s essentially a “flat” payroll tax.
I’d prefer the Fair Tax. If we’re going to substantially alter the tax code, let’s go large and get rid of income taxes altogether.
But. I despise VAT taxes because it’s a hidden tax on consumption. It’s a way for governments to hide their effective tax rates because it only taxes profits and nobody is going to disclose those.
This flat business tax is also hidden because it taxes payrolls and no company is going to disclose its payroll either. However, in this case this tax is replacing business and payroll taxes that are already not disclosed in the price of a product. It not different than what already exists.
One big benefit of the idea, it makes infrastructure investment tax free.
I’d prefer Cruz’ tax plan to what we have now. That said, I’d prefer the Fair Tax to Cruz’ plan.
Now that kind of plan would make big government much bigger at first. Then, the market collapses leading to bond collapse.
Consumers pay the entire VAT. Every piece is passed through to the end consumer. Businesses do not pay axes.
Same here. Cruz is my man so far, but I don’t like a VAT tax at all. I need to learn more about this plan.
Agreed.
European consumption VATs though, are per transaction point of sale taxes. With American sales taxes, I can compute my sales tax rate, currently it’s 8.25%. With a VAT sales tax, government is hiding their sales tax rate because it’s a tax on profits and the end consumer is unaware of how much that is.
This replaces the payroll and business taxes. Still a part of the overall business model that is passed to and paid for by consumers. It’s not a transactional or sales tax though.
To the extent that it’s a hidden tax, it’s no more so than the taxes it would replace.
The link I posted is a great primer.
Not just NO, HELL NO. VAT is the easiest tax in the world for the Political Machine to play games with.
Nope, no VAT
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