“I am not a fan of Trump’s tax plan. It is still too progressive for my taste. It still allows way too many people a free ride.”
I agree with you on both points. Even if his plan is as you have explained it, I’m not a big fan of increasing capital gains at any level. I also am not happy with 50% people getting “a free ride”. As one other freeper mentioned here, they should all have to pay something, even it starts at 1%.
I also take more stock on what Trump speaks, then what his tax plan says. He said he wants to tax the “rich”. I take at his word on that. He may be referring to what you have explained, but as he has on many issues, his words drift way further into liberal speak than I care to hear.
Furthermore, I think you and other Trump supporters have taken an overly simplistic, misleading euphemism to describe Cruz’s tax plan by saying he favors a VAT. The VAT, as you term it, is actually a flat 16% business tax that is supposed to replace payroll taxes. Please explain to me how exactly that increases the costs of goods and services, because I don’t see it.
Most people know to ignore what candidates say at rallies and on liberal news programs. They tell the truth, but not the whole truth. That is just a consequence of the format — a lot of sound bites and short answers. It short-circuits the liberal from twisting a long answer out of context. What they have really given THOUGHT to and that they know they will beheld to account for in terms of POLICY is in their position papers.
[The VAT, as you term it, is actually a flat 16% business tax that is supposed to replace payroll taxes. Please explain to me how exactly that increases the costs of goods and services, because I don’t see it.]
It is not really “flat” since it has a whole list of business costs that can be subtracted from sales revenues. Regardless, even if only labor costs and profits were not allowed to be subtracted, a 16% rate applied to those is a tax increase on businesses. Corporate income taxes are less than $400B and personal income taxes from small business owners are only $200B, and the employer side of payroll taxes is $800B, for a total of $1.4T. Cruz’s business tax is supposed to replace these but collect $1.9T, so there are $500B extra that logically will go into prices.
Even if it were revenue neutral, though, the psychological effect on the consumer of paying a 16% tax at purchase will either crush consumption or cause a lot of evasion. Except for imported goods, rents, utilities, groceries, haircuts, and other local services where evasion is tougher and people will just suffer with the 16% price hike.