[freeandfreezing]

Sen. Cruz's plan includes a 16% gross receipts or VAT tax on business sales. It is computed by subtracting certain expenses, not including salaries from the gross receipts from a business's gross receipts. So for many small businesses it is essentially a 16% tax on the owner's salary and profits.

For example, consider a guy who mows lawns. He owes 16% of his total sales less what he spent on gasoline, oil, and any new mowers or rakes he bought during the year. And then he owes 10% of his personal income from the business. So he pays at a rate of about 26%.

By contrast, a hedge fund manager earning millions of dollars a year pays at a rate of about 10%. So does a teacher working for the government.

I find it hard to see how a 16% penalty on being self employed or running a small business will help our economy.

[gleeaikin]

I imagine the idea is to add a 16% surcharge to the base fee, which is then saved for submission, the same as I charged 6% sales tax over and above the cost of the jewelry I Used to make and sell as a vendor.