Key Findings:
Senator Cruz’s (R-TX) tax plan would enact a 10 percent flat tax on individual income and replace the corporate income tax and all payroll taxes with a 16 percent “Business Transfer Tax,” or subtraction method value-added tax. In addition, his plan would repeal a number of complex features of the current tax code.
Senator Cruz’s plan would cut taxes by $3.6 trillion over the next decade on a static basis. However, the plan would end up reducing tax revenues by $768 billion over the next decade when accounting for economic growth from increases in the supply of labor and capital and the much broader tax base due to the new value-added tax.
According to the Tax Foundation’s Taxes and Growth Model, the plan would significantly reduce marginal tax rates and the cost of capital, which would lead to a 13.9 percent higher GDP over the long term, provided that the tax cut could be appropriately financed.
The plan would also lead to a 43.9 percent larger capital stock, 12.2 percent higher wages, and 4.8 million more full-time equivalent jobs.
On a static basis, the plan would cut taxes by 9.2 percent, on average, for all taxpayers.
Accounting for economic growth, all taxpayers would see an increase in after-tax income of at least 14 percent at the end of the decade.
It can be even simpler than that. Put it on-line. Delete the signature. Delete "occupation", since it doesn't matter. Delete deductions of all sorts. If you want a flat tax, make it flat. Not flat plus deductions for a list of thousands of special interest things.
ReplyDeleteOr just make it a national sales tax, collected every time you buy something and eliminate the income tax totally.
The national sales tax means nothing for the well off, but would make a dent for the less fortunate. It would also affect those on pensions/retirements which were determined under the current system.
DeleteYou can easily make adjustments for those things. A national sales tax would affect everyone who buys things. The rich buy more things than anyone else. But the morality is that every person would get the power to strangle government and pay less taxes by saving money instead of spending it. (not that many people would do this).
ReplyDeleteone of the suggestions for this is to cut a check for some amount of money to every adult. That offsets the taxes paid by the poorest people. But the truth is, America has the richest poor people on the planet. Our poor people have TVs, cable, AC, heat, cars, and smart phones.
If your goal is to pay for the government, any tax system will work just fine. But if your goal is to control people's lives, the income tax is the only tax system that works.
America has the richest poor people on the planet. Our poor people have TVs, cable, AC, heat, cars, and smart phones.
DeleteAmen.