Skip to comments.How Ted Cruz Would Balance the Budget
Posted on 11/12/2015 8:54:24 AM PST by conservativejoy
As he made clear, he's not going to 'pay' for more big government business as usual.
At the CNBC debate on October 28, Ted Cruz ï»¿97%released his tax reform proposal, which I believe is the best of all the presidential candidates' plans. At Tuesday night's debate, Cruz released a spending reduction plan showing how he will pay for the tax cut involved in the tax reform plan.
For the individual income tax under his tax reform, Cruz's plan provides for one flat rate of 10% on everything â wages, capital gains, dividends, personal business income, rent, interest, and all other forms of individual income. The corporate income tax would be abolished, and replaced with a 16% Business Flat Tax, which applies to sales of goods and services, minus all purchases and expenses for inputs for production. It automatically provides for immediate 'expensing,' or an immediate deduction for all purchases of plant and equipment, and all other capital investment, which inherently involves purchases of inputs from other businesses. It is essentially a consumption tax for business.
That net business tax, which also automatically abolishes all special-interest, corporate-welfare loopholes, raises an enormous amount of revenue, $25.4 trillion over the first 10 years alone. This enables the plan to include abolishing the Social Security and Medicare payroll tax, which is the highest tax most working people pay, with Social Security and Medicare financed in full. It also enables the plan to include abolishing the death tax, the Alternative Minimum Tax, and all Obamacare taxes, as well as the corporate income tax. With a standard deduction of $10,000 per adult, and a $4,000 personal exemption, the first $36,000 of income for a family of four would be exempt from all significant federal taxes.
(Excerpt) Read more at spectator.org ...
This is an outstanding article well worth reading in its entirety.
A couple things I don’t understand. Can the smart Freepers help me out?
Business income tax would raise $2.5 trillion per year?
Current corp income tax only raises about $300 or so billion now. Are there numbers to support the $2.5T?
Minor point: How is a tax based on net income a consumption tax?
Some good stuff here.
I think the difference is that all businesses are not corporations, but the revenues in the Cruz plan come from all businesses including corporations at the same flat rate.
A transaction for goods or services must occur to create the revenue to be taxed.
In truth there are only two type of taxes, consumption and wealth. Property taxes would be an example of a wealth tax. The tax is bases solely on the value of an item.
Other taxes like payroll, medicare, income, sales, etc. only vary in the means of collection. The actual tax money collected comes from the sale of goods or services to the end user. Therefore they are all consumption taxes embedded in the end price of the good or service and collected upstream.
How would Cruz answer this?It was a question to Carly Fiorina from moderator Gerard Baker, the editor-in-chief of The Wall Street Journal. Here’s the critical part:
...in seven years under President Obama, the U.S. has added an average of 107,000 jobs a month. Under President Clinton, the economy added about 240,000 jobs a month. Under George W. Bush, it was only 13,000 a month. If you win the nomination, you’ll probably be facing a Democrat named Clinton. How are you going to respond to the claim that Democratic presidents are better at creating jobs than Republicans?
I have a question. If we are talking about having expenses which would need to be reportable, how can you get rid of the IRS?
I went to Ted Cruz web site and while there are a lot of words about the tax plan, I didn't see anything that describes how the $2.5 trillion will be raised. No numbers.
He can explain how his tax plan would create million of jobs in the next decade and would also balance the budget.
The question posed to Fiorino which cherry picked “jobs added per month” for Obama, GW Bush, and Clinton needs to be answered by cherry picking other similar figures — such as Regan’s 8 years (up to 500,000 per month) and FDR’s first 8 years (ie Depression where jobs were lost at a precipitous rate). Then you can state that the US & world economy AND the economic condition left by the prior president (such as Carter’s malaise )are influences beyond the name of the candidate or their party affiliation.
Wrong by a factor of 10, even in Bush's worst times there were 130,000 not 13,000 jobs per month. So the question was bullshit from the get go.
As well as the Rat job figures likely mostly fed jobs, which produce nothing.
Maybe but as soon as they start extending things over 10 years I get skeptical. Anything can be changed in the very next budget.
“If we are talking about having expenses which would need to be reportable, how can you get rid of the IRS?”
Cruz said yesterday in a speech that some govn. workers would be needed to keep records (like you are talking about - reportable expenses for companies), and these workers would be put under the treasury dept., and the IRS be eliminated.
They lump the job losses in the last recession and spread that out over his term. As someone said cherry picked data.
Thanks. Wanted to make sure there wasn’t a contradiction.
The first thing all political jagoffs must stop, is this 10-year timeline crap. What administration would be in power after 8 years. Publish the numbers on a yearly basis only. Also, no free rides for ANYONE.
All must pay a minimum tax simply for the privilege of living in this country and for the defense of living here. Say 2-3%.
He’s the only candidate I’ve seen come out with budget cuts and the elimination of federal agencies.
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