The VAT: Coming Soon To A Campaign Stop Near You (Cruz Tax Plan)

American Enterprise Institute ^ | February 8 | Alan D. Viard

[Helicondelta]

Two Republican presidential candidates -- Sens. Ted Cruz, R-Texas, and Rand Paul, R-Ky. -- have proposed replacing much of the federal tax system with a VAT. Cruz's proposed VAT would have a 16 percent tax-inclusive rate, and Paul's proposed VAT would have a 14.5 percent tax-inclusive rate. Both VATs would be administered through the subtraction method rather than the credit invoice method used by most countries with VATs.

...

The biggest problem with the Cruz and Paul plans is their pronounced lack of tax transparency. The senators have consistently described their proposed levies as business taxes rather than VATs and have underplayed or denied the burden that the VATs would place on workers. Moreover, their proposed VATs would be largely invisible to the public because they would not be listed on customer receipts or pay stubs.

The Cruz and Paul plans would also repeal the payroll and self-employment taxes that are earmarked to finance Social Security and Medicare Part A. The repeal would have problematic implications, which Cruz and Paul have not addressed, for Social Security's budgetary status and the design of the Social Security benefit formula.

[Hoodat]

A VAT tax has NEVER eliminated ANYTHING!!

I thought we were talking about Ted Cruz's tax plan. Let's stop with the strawmans.

[Jane Long]

Check your frequency, Kenneth....that’s exactly what we’re talking about....CRuz’s Tax plan....like the title of this thread says.....The VAT....(Cruz tax plan).

[JJ_Folderol]

American Enterprise Institute... Not familiar with them.

What’s their position on importing Mexican hookers?

[EternalVigilance]

You’ll have to ask a Trump supporter.

[MarchonDC09122009]

You said a mouthful, and how!
No tax ever seems to “sunset” or truly go down.
I don’t trust a VAT tax, nor anything that smells of how euro fools fund their socialist state.
Simplify the income tax we have and reduce gov’t to essentials.
March in the streets to make it happen.

[Gasshog]

VAT is a Vulgar Word.

[Rusty0604]

I really don’t like the VAT proposal. It will add layers of bureaucratic paperwork for businesses, and in a short
period of time the gov’t will declare that they need to raise income taxes in addition to the VAT.

[LucienCA13]

No, I’m not sure. I know that if I can get out of CA and to NV, TX or FL that I will not owe State taxes and there is no sales tax on my internet orders. I know a 14 % price increase would lower sales. I do not know if I’m better paying 30% of my net income to the Feds or giving them 14% of sales instead.

[Nifster]

The AEI is hardly anti-conservative. Their tax analysis is usually spot on

Worries me that Cruz thinks that he can tax businesses. It is well known that businesses do not pay taxes their customers do.

The smart guy fails here

[Rusty0604]

I’m a Cruz supporter but I do not like the VAT tax proposal.

[Nifster]

Indeed

[Nifster]

And that is why a VAT does not work

[Nifster]

Not really because it is applied at every stop on the supply chain. You pay the final price plus an additional sales tax. You do not see the built in taxes along the way

[LucienCA13]

“It is well known that businesses do not pay taxes their customers do.”
_____________________
I used to believe that, and oddly still do. Yet after becoming a business owner, I found that it’s not always true.

[lewislynn]

The sCruz tax plan was dreamed up by his crony capitalist donors. It shifts the corporate taxes directly to small businesses, small business owners and employees.

All you need to know about the sCruz tax plan is his major donor Robert Mercer, a hedge fund manager owes $10 to $15 BILLION in taxes...YES BILLION. Would he like to shift that burden on to you? YOU BET!

[EternalVigilance]

For awhile, I had Cruz supporters telling me this wasn’t a VAT, when I knew darned well it was.

Glad to see that you’re not in denial.

[Edison]

What you do get with a VAT is access to all the untaxed money from illicit gains from prostitution, drugs and gambling.

Want to pay less tax, spend less.

[BlatherNaut]

"...Once a VAT is in place, Congress could easily increase the VAT any time it wants more taxpayer money to pay for new programs. Continually increasing the size of government would become considerably less painful because small increases in the VAT rate could raise substantial sums of revenue. An increase of just 1 percent would raise more than $80 billion per year by the end of the decade. The ability of the VAT to raise money will almost certainly prove irresistible to Members of Congress. The experience of other industrialized countries bears this out. As Table 1 shows, 29 of the 30 countries in the Organisation for Economic Co-operation and Development have implemented VATs..."

The Value-Added Tax Is Wrong for the United States

[UnwashedPeasant]

A flat tax is not a VAT.

This article is just anti-Conservative propaganda.

[PGR88]

Keeping VAT records is extremely complicated and will kill small business