Posted on 11/12/2015 8:34:47 AM PST by conservativejoy
At Tuesday's debate, Ohio Governor John Kasich was seemingly singling out Senator Ted Cruz when he said that the tax plans of his some of his competitors were unrealistic. On Wednesday's Hannity, Cruz rejected Kasich's claim.
Cruz's tax plan calls for a simple 10% flat tax on individual income and replaces the corporate income tax and all payroll taxes with a 16 percent 'Business Transfer Tax'. In addition, his plan would simplify the current tax code.
'What it would produce is incredible economic growth,' Cruz explained to Sean.
According to the non-partisan Tax Foundation, Cruz's plan would:
*Cut taxes by $3.6 trillion over the next decade.
*Cut taxes by 9.2 percent, on average, for all taxpayers.
*Create 4.8 million more full-time equivalent jobs
*Lead to 12.2 percent higher wages.
*Lead to an average increase in after-tax income of at least 14 percent at the end of the decade for all taxpayers.
*Lead to a 13.9 percent higher GDP over the long term.
So what does this all mean?
"That means if you're a single mom, if you're working making $40,000 a year, that's about an extra $5,000 in cash in your pocket to feed your kids, to help make ends meet," Cruz said. "Tax reform is an incredibly potent tool to produce economic growth."
The 16% business flat tax replaces corporate and payroll taxes.
I get a kick out of all the candidates, who ordinarily claim to be just like Ronald Reagan, screaming about how irresponsible these tax cut proposals are. I guess they share the same view of a static economy as the democrats.
Frauds, all of em.
Dyed in the wool politicians like Kasich say it can’t work because it reduces the amount of revenue from they peasants they can use to socially manipulate us and pay off their cronies.
How?
Here we go again...a flat tax on what? Measuring the income against which this is assessed is the trick, not the rate.
Measuring the income against which this is assessed is the trick, not the rate.
**************
Bingo.
So, what is meant by Payroll taxes in this instance?
This is what one web site defines them as:
http://www.alllaw.com/articles/tax/article5.asp
Payroll taxes are the state and federal taxes that you, as an employer, are required to withhold and/or to pay on behalf of your employees. You are required to withhold state and federal income taxes as well as social security and Medicare taxes from your employees’ wages. You are also required to pay a matching amount of social security and Medicare taxes for your employees and to pay State and Federal unemployment tax.
To be fair this same foundation (Tax Foundation) does say Cruz’s tax plan is, in essence, a VAT. Let’s not run away from that fact and face it head on.
http://taxfoundation.org/blog/ted-cruz-s-business-flat-tax-primer
I say this as a Cruz supporter because the crucial point is not that he is proposing a VAT, but that he’s proposing it in PLACE of the existing tax code. The minute he (or anyone) talks about adding a tax without taking any away, that’s when we should be concerned. And let’s take a closer look at what he’s proposing (according to this Tax Foundatjon):
“...a subtraction-method value-added tax [which is what Cruz is proposing] is actually just a simple combination of a sort of corporate income tax and an ordinary payroll tax. (Fittingly, Senator Cruz’s plan uses this VAT to eliminate the corporate income tax and the payroll tax.)”
So you see FRiends, Cruz isn’t adding any new taxes with his proposal, after all, all businesses (whether they be corporations or small businesses) pay a payroll tax. Cruz is replacing the payroll tax and the corporate income tax with his plan he is not proposing new taxes on top of old ones.
This is really the heart of the matter. Can concerns be raised about the “fairness” of VAT’s themselves? Sure. But we need to remember that what Cruz is proposing is not the same as the European system, which has VAT’s on TOP of other business related taxes. That difference is significant and shouldn’t be ignored.
A flat income tax is a vat - a subtraction method VAT by definition. I’d prefer a tax based on something other than income but this is a damn sight better that what we have.
It’s border adjustable which is YUUUUUUGE.
I’m in on it.
Simple, supply & demand. When there is more supply of money to spend, goods & services become in greater demand. That increased demand means more people to fulfill those demands resulting in hiring across many types of employment.
Increase in demand can be easily gained with exports.
Due to border adjustability, our exports would leave our shores without our tax costs built-in [as the costs currently ARE built-in]. That will make our exports cost less hence more demand for them.
Imports will become more expensive/have their profitability reduced b/c imports will have the tax added to their price. So their price will probably rise a little and their profitability will reduce a little [imports have been eating our lunch b/c they have systems to send us goods without tax costs.]
That’s a good point I hadn’t thought of that. Almost like a built in tarrif.
So, what is meant by Payroll taxes in this instance?
This is what one web site defines them as:
http://www.alllaw.com/articles/tax/article5.asp
Payroll taxes are the state and federal taxes that you, as an employer, are required to withhold and/or to pay on behalf of your employees. You are required to withhold state and federal income taxes as well as social security and Medicare taxes from your employees’ wages. You are also required to pay a matching amount of social security and Medicare taxes for your employees and to pay State and Federal unemployment tax.
Yeah - kind of like our founders envisioned....
The jobs estimate is likely low.
The flat tax does not address federal taxes that Congress cannot justify under its constitutional Article I, Section 8-limited powers.
”Congress is not empowered to tax for those purposes which are within the exclusive province of the States.” Justice John Marshall, Gibbons v. Ogden, 1824.
Taxpayers would still be paying unconstitutional federal taxes under a flat tax system.
Changing the tax plan will mean zero unless and until many other ‘plans’ are changed. Reducing the size of government (both employees and spending) by at least 10% as a start, eliminating many departments such as energy, education and environment. Close the border, send all illegals home which would happen if all benefits were removed. No more freebees”. Remove laws, regs and other government restrictions that keep the Private sector from doing its job of creating new businesses and more jobs. And of course it would help if lying would be replaced by telling the truth. Right now evil is on the throne and good (decency & truth) is on the gallows. One more thought, it would help is our educators started to once again teach and give up the brainwashing programs.
That’s why Cruz also introduced a plan to balance the budget by spending cuts and the elimination of at least 5 federal agencies, one of them being the Dept. of Education.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.