This story broke a short time ago in Investors Business Daily. I think you’ll be interested in their take on Ted Cruz’ tax reform plan which is NOT REVENUE NEUTRAL, but rather is designed to “make government smaller, not to raise the same taxes to pay for the same spending.” Without further embellishment here are the important points, and at the end, information on the Cruz’ plan to take on the IRS targeting scandal:
That would do more to reduce inequality of wealth than everything ever dreamed up by Hillary Clinton and fellow “progressives,” while dramatically increasing America’s net worth. ~ International Business Daily by Lewis K. Uhler and Peter J. Ferrara
The tax-reform proposal unveiled by Ted Cruz last week is as transformative, intellectually dominating and economically and politically revolutionary for 2016 as Kemp-Roth was in 1980. Indeed, even more so.
Cruz’s plan would scrap the current income tax code and replace it with a simple, single, flat rate of 10%, to be paid by everybody on everything — wages, profits, capital gains, dividends, rent, interest and all forms of individual income. No one would be able to claim that billionaires pay lower tax rates than their secretaries or that the system is rigged to favor the rich over the middle class.
The payroll tax, the biggest tax on the poor and middle class, would be erased, with Social Security and Medicare financed in full with no deficits. Included is a $10,000 standard deduction ($20,000 for couples filing jointly) and a $4,000 personal exemption. It means the first $36,000 for a family of four is exempt from all taxes.
The plan retains the current Child Tax Credit and increases the Earned Income Tax Credit by 20%, both favoring poor and lower-income workers as well. So this new system is rigged to favor poor- and middle-class taxpayers.
Most taxpayers could file their income taxes on a postcard under this Simple Flat Tax reform. It means that “we can abolish the Internal Revenue Service as we know it,” Cruz said.
The corporate income tax would also be abolished and replaced with a 16% business flat tax. The 16% rate would apply to a business’ gross receipts from sales of goods and services, minus purchases from other businesses.
That involves immediate expensing, or deductions, for the costs of plants and equipment, and all other capital investment, which all involve purchases of inputs from other businesses.
That will promote investment in worker productivity — the foundation of rising wages — and in businesses providing good-paying, blue-collar jobs like heavy industry, mining, energy, farming, ranching and manufacturing.
But there would be no more corporate welfare, special-interest credits and deductions, or crony capitalism as under the current corporate income tax.
Studies confirm that our current corporate income tax devastates workers: working people actually bear 80% of that tax in the form of reduced wages that would otherwise be paid. The Tax Foundation scores the 16% business flat tax as raising $25.4 trillion in federal revenues over the next decade, which would account for 71% of all federal revenue.
Cruz’s reform would also abolish the death tax and alternative minimum tax, as well as the net investment income tax of 3.8% and the Medicare surtax of 0.9%, both imposed by ObamaCare. Cruz provides for a Universal Savings Account of $25,000 a year for all working people, which could be withdrawn at any time for any purpose, with taxes deferred, as in an IRA. Read more at IBD with info on Cruz’ plan for personal savings and investment accounts.
Senator Ted Cruz has also asked the Department of Justice to preserve all IRS-related documents related to targeting conservative groups, and has claimed the right to reopen the investigation that allowed Lois Lerner to plead the Fifth, even though she had already spoken on the issue, and legally could not plead the Fifth Amendment. She has recently been absolved of her stragetic targeting of conservatives.
Mr. Cruz said in a letter to Attorney General Loretta Lynch. “Given this Administration’s refusal to conduct itself appropriately, or take the issue of the potential illegal conduct of IRS employees seriously, any subsequent administration should reserve the right to reopen the matter, conduct its own investigation, or appoint a special prosecutor to conduct an investigation.” Read more here. And yet more at Young Conservatives.
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