Posted on 02/08/2016 7:00:17 PM PST by kiryandil
**snip**
...Ted Cruz has endorsed policies that would fundamentally change who pays the federal government’s bills, and how.
Expect the establishment wing of the Republican Party to increasingly draw attention to this fact, especially when it comes to his tax policy. While on the one hand Cruz’s plan hews to Republican orthodoxy in its large tax cuts for the wealthy, he also embraces a European-style Value Added Tax, which is a lot like a sales tax, as replacement for all payroll taxes, and which would enable the elimination of all income tax outside a 10% flat tax for all earners...
**snip**
...The downside to this is that his plan is both very regressive - shifting the burden of paying for the federal government onto the middle and lower classes during a time when only wealthy Americans are seeing economic gains - and that it places particular pressure on older Americans living off of social security.
As my colleague Shawn Tully points out, the Cruz plan would increase the price of the things we buy everyday by a lot. Cruz would argue that this would be more than offset by his tax plan’s increase in take-home pay. But what about people who no longer earn wages, like retired folks living off social security? They worked their whole life paying income taxes, and if Cruz’s plan is enacted, will have the rules of the game change on them when they can afford it least. Their entitlement payments won’t go up, but the price of everything they buy will.
Since older Americans vote in greater numbers than any other demographic group, and senior citizens are now one of the Republican Party’s most reliable voting blocks, expect Republican hopefuls to increasingly attack Cruz on this point in New Hampshire this week and beyond.
(Excerpt) Read more at fortune.com ...
Cruz is NOT proposing a VAT tax. That is an outright lie.
The primary impact of replacing the income tax with a VAT-style sales tax is to capture all the underground and illegal income.
Characterizing it as ‘taxing Grandma’ is nothing but class warfare (consider the source here) and while there is a challenge with respect to retirees, I’m sure it can be worked through.
I’m in the Trump camp, and I like his plan, but this is one area where I like the Forbes/Cruz plan better.
Apparently, National Review thinks it's a VAT. They had another article on the same thing a few days later.
Still waiting to learn how a flat tax is a VAT...
It kind of makes sense, because businesses don't pay taxes - their customers pay the tax.
So... Not a VAT...
.
This is a story for fools.
There is nothing accurate anywhere in this screed.
.
So cutting business taxes from 35% to 16, ending capital gains taxes, etc... Not to mention a whole host of others... Is a bad thing?
In what alternate reality?
Thanks. You solved a small mystery for me.
I think it's April Ludgate slapping some guy.
Thank you for introducing me to that fiery wench, April Ludgate, whom I did not know existed before tonight, onona.
VAT is a job killer and doesn’t work at all. Look at Europe, to see what having a VAT and an income tax looks like.
It kind of makes sense, because businesses don't pay taxes - their customers pay the tax.
.
No VAT is proposed.
Currently employers pay ~7.5% in FIca and SS taxes
++++++++++++++++++++++++
You raise a good point. In addition to the impact of VAT affecting retired seniors, I’m interested in learning what Cruz’ plan is to fund the employer’s-share of payroll taxes.
_______________________________________________________
Cruz is using the 10% individual flat tax and the 16% business tax to replace all the federal and FiCA taxes. That is the point. I personally prefer the pure flat tax, but this plan is far stronger than most.
Detail here
https://www.tedcruz.org/tax_plan/
It's great fun :)
oh, wait.......
So. Is the current tax on businesses a VAT? If not, what is the difference that defines one as a business tax and the other a VAT. Please be specific...
Apparently, National Review thinks it's a VAT. They had another article on the same thing a few days later.
Apparently, "economists" are calling the Cruz flat business tax [16%?] a "VAT".
It kind of makes sense, because businesses don't pay taxes - their customers pay the tax.
Yep, neither side has a monopoly on questionable tactics (or hyperbole) here on FR. Doesn't make it right.
Apparently, National Review thinks it's a VAT. They had another article on the same thing a few days later.
Apparently, "economists" are calling the Cruz flat business tax [16%?] a "VAT".
It kind of makes sense, because businesses don't pay taxes - their customers pay the tax.
They can call it a doughnut, it doesn’t make it one.
A VAT is a tax on each stage of production. Hence the name; value added.
How is a tax on gross receipts, minus fica/etc, the same?
Answer: it isn’t.
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