Posted on 04/27/2015 12:43:46 PM PDT by SoConPubbie
LAS VEGAS — Sen. Ted Cruz has been gunning to abolish the Internal Revenue Service since coming to Washington two years ago.
To critics of the Texas Republican in Democratic and GOP circles, it sounds like bluster. The fiery rhetoric garners hearty applause from conservative audiences, particularly since revelations in 2013 that the IRS targeted Tea Party groups for extra scrutiny. But some federal agency is going to have to collect taxes, so Cruz's vow to shutter the IRS smacks of a politically motivated campaign promise rather than serious policy — at least to some.
In an interview with the Washington Examiner on Friday, the 2016 presidential candidate began to put some meat on the bones. Cruz, 44, explained how "abolishing the IRS" fits into his proposal, still being crafted by his team of economic advisors, for wholesale tax reform. This proposal, which Cruz plans to unveil later this year, is a key plank in his domestic agenda for economic growth that he would pursue as president.
"When it comes to jobs and growth and opportunity, the two most effective levers that the federal government has to facilitate small businesses creating new jobs, are tax reform and regulatory reform," Cruz said late last week, during a 20-minute discussion while on a brief swing through Las Vegas. "I am campaigning on a flat tax that would allow every American to fill out his or her taxes on a post card that allow us to abolish the IRS."
Cruz said he envisions shifting the tracking and collection of federal taxes to "some much smaller division" of the Treasury Department. The senator said that replacing the current, complex tax code with a simple flat tax would eliminate most of the work the IRS needs to do, making the agency obsolete and "irrelevant."
In its purest form, a "flat tax" treats all taxpayers equally. Income is taxed at the same rate regardless of earnings or wealth, while allowing for no tax deductions or exemptions. But Cruz said his flat tax proposal might allow some deductions, possibly for popular write-offs like for charitable donations and mortgage interest charged on a primary residence, paid annually by homeowners.
"We will roll it out with precise details in the coming weeks or months," he said. "There are trade-offs to be had and we're right now internally having those debates, in terms of whether you have a couple of deductions or exemptions or not, at what rate the flat rate is set, what level of standard deductions and so those trade-offs we're currently debating."
Cruz said the theme of his campaign rests on restoring Americans' optimism for the future, as defined by three elements: "No. 1, bringing back jobs and growth and opportunity; No. 2., defending our constitutional liberties and No. 3, restoring America's leadership in the world."
The Texan emphasized that regulatory reform was just as important as tax reform in satisfying his top goal of igniting the economy and fueling job growth. Unlike his plans for tax reform, which would presumably require congressional sign-off, Cruz said he could pursue a significant amount of regulatory reform through his executive authority, and that he would do so aggressively during his first 100 days as president.
Cruz said that Washington has implemented reams of regulatory rules that executive branch bureaucrats wrote on their own, outside of the legislative process and without the approval of Congress. Accordingly, the senator, who has at times criticized President Obama for overstepping his executive authority, said that he would use his executive authority to roll many of these regulations back.
"One major area of unilateral steps concerns regulatory reform, the second half of job growth," Cruz said, explaining his views on where it's appropriate for a president to govern by executive action.
"There are a great many things that can be implemented unilaterally in the executive," he said. "The president, under Article II of Constitution, is charged with executing the laws. Many of the most burdensome rules coming from Washington come from the executive branch from unaccountable, unelected bureaucrats and if I'm elected president, one of the very top priorities is going to be to rein back those regulations, those executive orders, those rules from Washington that are burdening small businesses and killing jobs."
A vast fraction of regulatory "law" is by consent decree in Federal court. I don't see how Cruz is going to undo that without the kind of autocracy he despises.
From the article: “In its purest form, a ‘flat tax’ treats all taxpayers equally. Income is taxed at the same rate regardless of earnings or wealth, while allowing for no tax deductions or exemptions. But Cruz said his flat tax proposal might allow some deductions, possibly for popular write-offs like for charitable donations and mortgage interest charged on a primary residence, paid annually by homeowners.
“We will roll it out with precise details in the coming weeks or months,” he said. “There are trade-offs to be had and we’re right now internally having those debates, in terms of whether you have a couple of deductions or exemptions or not, at what rate the flat rate is set, what level of standard deductions and so those trade-offs we’re currently debating.”
And, therein lies the fundamental flaw with an income tax...the leviathan cannot avoid the urge to ‘tweak’ it, to address ‘inequities based on perception’, to make some folks more equal than others.
Rather we should be looking into consumption based taxation, ala the Fair Tax (without that silly ‘prebate’ notion, IMO). Couple that with a requirement for 75% approval in the Senate and House before changes can be made.
A great many folks decry the ‘double taxation’ associated to spending accrued retirement savings in this model. That can be addressed in a couple of different ways, IMO, and would be sunsetted at a date certain in the future.
Time to put the entire IRS out to pasture...
I have a CPA and aEnrolled Agent Gnome in my social circles, they have told me...
* Make the Flat Tax and alternative to the current system, side by side, it will be the only way it will pass and it will be adopted over-time ( from the E.A.)
* The CPA has changed their mind and is for a new system as they noted they will change their practice to help Small Businesses do the right things with their new Profits in this Cruzian world.
Bring on the change, it will be all good....
Abolish the Federal Department of Education
I agree. Once you start with the exemptions and deductions you’ve opened the door and it won’t stop there.
Keep it fair. A flat rate for everyone. No deductions or exemptions. Everyone pays the same rate. It is simple, fair and you avoid all of the special interests and lobbying.
Agreed. Privatize education. Privatize it all.
I see advantages to a sales tax (particularly the underground economy), but it would double tax money that has been saved and upon which taxes have already been paid.
That’s up to Congress who seems loathe to act on anything other than legislation that only makes it seem more timid.
Wrong. A flat rate income tax is still an income tax. There should be no income tax whatsoever. The "progressive income tax" is a Marxist abomination.
Income taxation is wrong for so many obvious and valid reasons, I presume any conservative who has educated himself is well aware of this. But here are a just few:
If there is to be any federal taxation at all, the taxes should be consumption based. Yes, sales taxes.
At least then, those who consume the most end up paying the most taxes, and that's about as fair as taxation is ever going to be.
The income tax was fomented on the People by so-called "progressives" who said it would only be for the ultra-rich, and it has been systematically shifted onto the middle class ever since. The progressives lied.
Income taxation is nothing short of fractional slavery, whether flat or otherwise.
Ted Cruz should stand strong here and make the abolition of the IRS a central policy of his campaign.
It's about time for the People to hear some fresh, new ideas for removing the yoke which we have labored under for a good century or so.
How few USAians know these things. How many USAians, even hereon, would vehement argue my statements are untrue.
Constitutional USA died upon the _passing_ _law_ which created the _reserve_, income tax and removing sovereign states votes from the Senate. It has been surviving only upon the extremely hard work of real USAians only. The work to sustain its life is now tantamount to slavery for the few who actually work, paying for USG, USG employees, USG beneficiaries and USG pogroms.
Modern USA will die when the criminal economies (above), have reached (decrepit) maturity. Sometime soon. At that time the gamers will declare they own everything, including you and your family; having been willing beneficiaries of the ponzi scheme they have been running.
I’d be okay with that also. As long as our present system is gone along with the IRS.
I prefer a flat tax for all incomes. Everyone should have to pay. The sales tax would work except then they talk about having to give poor people refunds, etc., then there you go again with a big agency full of union gov’t workers.
I am going to respond to you because I can see you are new to these issues and I want others to be able to see the fine points.
> “I prefer a flat tax for all incomes.”
A flat tax never stays flat. There have been 5 flat tax laws in American history beginning with Lincoln’s 1% flat income tax in 1861. There were others after 1861 but they were either struck down as unconstitutional or they were not renewed because they were unpopular. But each would get expanded in subsequent sessions of Congress until they were taking the form of graduated.
The income tax that accompanied the 1913 16th Amendment was also flat but quickly ‘expanded’.
The lesson of history is A FLAT TAX NEVER STAYS FLAT. Many think flat tax, no deductions, no exceptions but they don’t realize there is no Constitutional Amendment to keep a flat tax flat. So subsequent sessions of Congress will take say a 10% flat tax and make a new bracket or two so that it becomes say 7%-10%-14% etc. There’s nothing to stop this. Congress can always do it because the 16th Amendment gives them a license to do it.
> “Everyone should have to pay.”
Poor people like grandmothers that live alone on Social Security have to get by with about $980 per month. Take a 10% flat tax out of their income and that’s $98 per month. To those kinds of people that represents an enormous amount of money.
This is why the Flat Tax is called ‘regressive’ because it hurts lower income people more. We don’t want a society that hurts poor people by taxing them with a regressive tax.
> “The sales tax would work except then they talk about having to give poor people refunds, etc.,”
There is a return of taxes already paid (rebate) but not just to poor people but to all people equally. Grannies on Social Security get the same rebate as a billionaire. It’s about $225 per month and represents 23% of $980 per month.
The idea is that no American is taxed on the essentials of living. Here it is with emphasis::
AMERICANS ARE FREE FROM FEDERAL TAXES ON SPENDING FOR THE ESSENTIALS OF LIVING.
This is the same for old age pensioners, billionaires, whether one lives in high-cost Manhattan NYC or low-cost North Dakota. It’s the same; no exceptions. And although it can change in numerical value, it can never grant exceptions to one group over another; why?
Because the 16th Amendment will go away leaving federal government taxation to fall under the original provisions of Article I, Section 8:
“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence[note 1] and general Welfare of the United States; but all Duties, Imposts and Excises shall be ***uniform*** throughout the United States”
So there will never be games played with taxes because it would be unconstitutional to do so.
> “then there you go again with a big agency full of union gov’t workers.”
Nope. The National Retail Sales Tax or NRST is collected by States for the US Government. Most of the States collect sales taxes now. They will add another sales tax for the federal government.
The Flat Tax requires an IRS to stay in place because it causes each American to pay income tax to the Department of the Treasury. Then when the Flat Tax starts to grow and become graduated as it always does, then the IRS needs to grow to keep up with the job of collections and enforcement.
Lastly as for enforcement, even though you didn’t mention it, the enforcement of the NRST is enormously easier than enforcement of a Flat Tax which is an Income Tax.
Remember the Flat Tax is Income Tax, it is a ‘baby’ Income Tax that will grow up into what it has become today. And Tax lobbyists will love to be in on the ground floor of watching it grow because it brings them a lot of work, a lot of new clients at top dollar.
Here’s a real easy question & answer guide that reveals a lot about a consumption tax:
This election cycle just got more interesting.
I was assuming exemptions and individual deductions as we have now so granny can keep her SS, but definitely do away with EITC and other tax credits that enable people to get thousands in “refunds”.
I have seen some proposals on nat’l sales tax that were pretty convoluted, but if there was a plan as simple as you suggest, that would be the most fair. I’m afraid that the gov’t would turn it into a fiasco just as the FIT.
The States should collect the taxes the federal gov’t needs to fulfill their constitution responsibilities ONLY, not one penny more. If we could get to that it would solve a lot of our problems.
BTTT
fl
Cruz had best get such changes off to a running start before becoming POTUSA.
Agree.
A retail tax would eliminate the need for ANY tax forms that workers would have to deal with. The other problem with just “simplifying” tax laws is that it leaves the door open for those laws to start becoming more complicated again. Complexity creep. Congress (both parties) can not resist the temptation to add just one more rule or loophole or exception.
Taxes should NOT be used as a carrot or stick to shape the behavior of Americans.
A consumption tax would eliminate the need for any tax forms and for the intrusive window into citizens’ lives. Furthermore, it would tax everyone, not just the workers. Visiting tourists, illegals, criminals, .... All would contribute.
That said, Cruz’s plan is better than no plan. I’d vote for him and for his plan as an improvement over what we have now.
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