Posted on 01/15/2016 6:58:15 AM PST by Kaslin
Tax reform is a key part of reviving our economy so that the 21st century is another American century. That's why Senator Marco Rubio put together a tax reform plan that would generate economic growth, an employment boom, and rising wages for American workers.
The Rubio tax plan would make the economy grow twice as fast as it has this century because it would lower taxes on hard-working families, allowing them to take home more of what they earn so they can use it to provide a better future for their children. It would reduce taxes on saving and investment, the lifeblood of a thriving economy, so that businesses can create more jobs and pay their workers more. And it would make the way we tax our businesses competitive with other nations that are outcompeting us today for investment and jobs.
The Rubio tax plan safely achieves these enormous benefits while creating no risk to the economy or to our shared goal of a limited government.
The same cannot be said of Senator Ted Cruz's tax plan. Sen. Cruz's plan would threaten the stability of the economy and help liberals achieve their dreams of a bigger government by creating a value-added tax, or VAT.
You are probably unfamiliar with a VAT because it is mostly a tax foreign countries use, especially in Europe. European countries use their VATs to levy high taxes on the middle class so they can fund their enormous governments. As leading anti-tax crusader Grover Norquist is fond of saying, "VAT is a French word for big government."
Liberals have wanted a VAT for years because of its ability to raise large amount of revenue unsuspectingly from the middle class. They want that revenue to grow government even more than they already have.
Cruz argues that his plan is not a VAT because businesses would pay it, rather than it being collected when families make purchases like is done in Europe. Don't be fooled. Cruz's VAT and European VATs are economically identical, and his entails the same substantial threat of growing government.
The VAT raises a whopping 71 percent of all the revenue in Cruz's plan. It does so because it applies to an enormous tax base, including every dollar of all Americans' wages. Because of this, a small increase in the rate results in a huge tax increase, while being largely hidden from the unsuspecting public.
That is why Sen. Cruz's VAT is such a risky venture. It is a liberal's dream mechanism for getting the revenue they need to transform our government into a European one. Once they get ahold of it, the sky is the limit for taxes.
Families will bear a large burden of the VAT. Sen. Cruz likes to say that a family of four making less than $36,000 a year would pay no tax under his plan. But that is untrue. Under his VAT, they will pay a 16 percent tax on every dollar they earn. That is more than they pay in payroll taxes today. That family of four would pay nearly $6,000 in tax under Cruz's dangerous VAT.
A VAT would be economically destabilizing because it would create an enormous amount of uncertainty. Businesses thrive on consistency and predictability, and until they understood how the VAT would impact them, they would hunker down and put off major decisions, much like they have done under Obamacare and other big-government ventures during the Obama years. Families would pay the price with slower economic growth and less opportunity.
The IRS needs a major overhaul. It has lost the faith of the American people, and rightfully so, because of its shameful targeting of conservative groups to help Democrats win elections. Sen. Cruz says his plan would abolish the IRS. But that is inconsistent with his VAT, which would be difficult to enforce. How will he collect the massive amounts of revenue his will raise with no agency to enforce it?
VATs are way outside the mainstream of conservative economic thought for good reason. Cruz's support of a VAT is as troubling as his backing of an unsafe return to the gold standard. A reversion to the outdated gold standard would tank the economy. And if it were in place when his VAT went into effect, the two in tandem would necessitate a steep drop in everyone's earnings. Not to mention that it would help China and Russia, the world's leading gold suppliers.
The economy is still struggling under the weight of President Obama's failed ideology. Now is the worst time to threaten it with a hazardous tax like the VAT. Marco Rubio's plan carries none of the associated risk and delivers more growth to help America's working families. When it comes to taxes, the conservative choice couldn't be clearer.
In other words, Michael Johnson is a Rubio supporter.
He should just come out and say it.
I wouldn’t care if Rubio said no taxes at all I would not vote for him.
NO VAT EVER! PERIOD! VAT is the reason that the Socialist countries of Europe have a lower standard of living than the USA. EVERYTHING has an extra tax to cover their Socialist Government. Imagine something that costs $100 here......now imagine that same thing costing $150 in Europe. NO VAT EVER!
I’ll go with Art Laffer over Michael Johnson(?).
I’m glad people are starting to talk about this hidden tax plan.
Not familiar with Ted's proposal, but anyone who has ever spent any time in Europe knows full well that a VAT makes everything very expensive, to the point of reducing the birth rates (of the NATIVE populations-not foreign freeloader invaders) because raising a child is VERY expensive.
Of course if we EVER plan to dig ourselves out of the bottomless pit of $19 TRILLION, we may have to consider additional sources of tax revenue (dare I say "increased taxes"?).
Second that.
No VAT, NEVER.
The tax collection method is not the problem. The problem is spending. Until we spend less than we take in, say down to 17% of GDP, then the problem will always be the same.
Debating or changing the tax collection method is only changing who’s Ox gets gored.
Last night Cruz tried to tell everyone his VAT isn’t a VAT because it replaces other taxes.
Yeah right and the check is in the mail. When’s the last time we fell for that line?
And Lucy won’t pull the football, either.
Goodbye.
This is all academic. I would rather hear how he intends to get this through Congress, through the media, and enacted. Republicans have proven they don’t have the guts to push legislation that isn’t approved by the media, and the nightly news will start off with a dozen manufactured and deceitful sob stories every night until they concede. I would rather hear how he is going to find a spine for McConnell to get this past Senate Democrats who will simply refuse to allow it to come to the floor. They can talk tax plans all they want, until I hear a plan or see at least a little courage to get something done, I won’t believe it.
Yeah Trump's.
Payroll taxes and corporate taxes are also "hidden" from the average tax payer.
The ‘FAIR’ Tax that Huckabee and some others talk about is an inflated sales tax. It puts a 23% tax on retail goods. Also called a ‘consumption tax’.
If you can’t tell, this will CRIPPLE the retail industry, and cause the price of goods to rise SUBSTANTIALLY!!!
Add this tax on to already existing state sales taxes and the price of the product you are buying just skyrocketed!
Not until the border is secured with a big beautiful wall, illegal immigrants are deported, abolishment of all trade deals where we have the short end of the stick (probably all) and at least 10 solid years of manufacturing growth and spending cuts.
Agreed.
Just another Ted Zeppelin inadvertent error.
I’ve never seen Cruz promote a VAT tax?
One hundred percent fair point.
A new tax is not needed. Slash spending.
The only thing VAT and flat have in common is that they rhyme.
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