Under the Simple Flat Tax, the current seven rates of personal income tax will collapse into a single low rate of 10 percent. For a family of four, the first $36,000 will be tax-free. The Child Tax Credit will remain in place, and the Simple Flat Tax Plan expands and modernizes the Earned Income Tax Credit with greater anti-fraud and pro-marriage reforms. As a result, the Simple Flat Tax will ensure that low- and middle-income Americans have greater opportunities – not only through minimal taxes, but also through better, high-paying jobs that the Simple Flat Tax will generate. Under the plan, deductions for charitable contributions and mortgage interest payments are preserved.
The IRS will cease to exist as we know it, there will be zero targeting of individuals based on their faith or political beliefs, and there will be no way for thousands of agents to manipulate the system.
For businesses, the corporate income tax will be eliminated. It will be replaced by a simple Business Flat Tax at a single 16 percent rate. The current payroll tax system will be abolished, while maintaining full funding for Social Security and Medicare.
The convoluted tax code will be replaced with new rules of the game – so simple, in fact, that individuals and families could file their taxes on a postcard or phone app. The Death Tax will be eliminated. The Alternative Minimum Tax will be eliminated. The tax on profits earned abroad will be eliminated. And of course, the Obamacare taxes will be eliminated. Also gone will be the unending loopholes in the current code, the stacks of depreciation schedules for businesses, and the multi-tiered rates on income and investments. Under the Simple Flat Tax, the Internet remains free from taxes.
The results will be truly dramatic. According to the well-respected Tax Foundation, the Simple Flat Tax will deliver an economic boost of tremendous magnitude. In the first decade, the Simple Flat Tax will:
Boost Gross Domestic Product by 13.9 percent above what is currently projected.
Increase wages by 12.2 percent.
Create 4,861,000 additional jobs.
Not good enough.
Repeal the 16th Amendment. I you don’t, the “progressive” tax structure will coming roaring back.
I can’t get the video. Did anyone talk about the fact that the business tax looks a lotIke a VAT?
Ping.
Sorry Cruz, but I like Trump’s tax plan better.
The problem: it's unlikely the 10% flat tax, as proposed, can replace the individual income tax, much less also replace the payroll taxes (which are 15.4% combined, on the first $118,000 of wage income).
I've done the math: With a simple deduction of about $36,000 per household, we would need a 21% flat tax rate on the income above that just to replace current income tax revenues.
This isn't hypothetical. I've used the IRS's own numbers, and chose $36,000 for the standard deduction because it would eliminate individual income taxes completely for the bottom 50%.
So, Cruz's 10% plan will fall short by about 50% even BEFORE the elimination of the payroll tax was instituted.
There's simply no way it can work, as proposed.
The best plan by far. Not one other candidate has a better plan, in fact, some others actually claim to be planning to cut taxes, when you study their plan, it is a tax increase. I don’t want to name names, but his initials are Donald Trump.
1. Cutting the current US$1 TRILLION cost of yearly tax compliance and economic opportunity costs by over 90%.
2. Bringing back most of that US$15 TRILLION in American-owned liquid assets now sitting in foreign financial institutions.
3. Removing over half the lobbyists in Washington, DC and their corrupting influence.
4. Making the USA one of the world's best places to operate a business because we don't tax the very process of earning money.
5. Eliminating a huge source of identity theft since we don't need to send in intimate details of our finances with yearly tax filings.
All good candidates should clearly state they want a simple system that puts people’s time to productive use. They should state that they are flexible on the details...whatever can pass congress. Flat? Fair? 999? Simple? Hybrid.
Neither Cruz nor Carson not the others should get pushed into a corner defending a specific feature other than replacement of the current system.
In discussing features, they should discuss the features that benefit the pro-lifer flipping burgers or changing oil at JiffyLube. The obsession with the top end is not a winning strategy.
For me, a true reform would get rid of deductions on salaried income. Do that, and there is no reason for individuals to file individually. The employer deducts based on whatever table they have and its done. Its not the employee’s responsibility. If a mistake is made, IRS comes knocking on the employer’s door, not the individual.
If you are a business, or self-employed, then obviously you are taxed as such and have to keep track of your expenses. But a salaried employee should not be individually responsible for his tax.
There is no such thing as a federal "business tax". The "business tax" is a NEW TAX on small business. The corporate income tax would be subsidized/paid for by the NEW TAX ON ALL BUSINESSES...IOW, the eliminated corporate tax would be paid for off the backs of small business owners.
If you have a business you would have to pay a 16% "business tax" in addition to a 10% personal income tax.
The total of payroll/self-employment tax is presently 15.2%...the NEW BUSINESS TAX is 16%...If a business owner earns $36,000 or less s/he's income tax exempt. That leaves 0.8% income tax collected. It doesn't add up.
It should be called the sCruz tax.
bfl
In 1980, Reagan asked: “When will we have the courage to say that businesses don’t pay taxes.” Reagan pointed out that businesses only collect taxes, and the taxes are ultimately paid by the consumer.
Businesses and organizations of any kind should pay no taxes. This would wipe out all government interference in churches and political groups.
Repeal the 16th Amendment. The FAIR Tax is the way to go.
Why does Larry Kudlow always repeat himself? Sound a bit senile.
ANY income tax structure *will* be modified by current or future Congresses to include deductions for their pet projects. It may start out as something as benign as deductions for loss incurred from some natural disaster, but it won’t stop there. The simple fact is any income tax will eventually become the same sort of monstrosity we have now. AND, they all will require an IRS-type agency to verify people are not cheating.