Thus, on the eve of last night’s debate, Ted Cruz, channelling Herman Cain from four years ago, unveiled a plan for a flat tax of ten per cent on personal income. Those are the hard numbers. And every single income decile sees a double-digit increase in after-tax income…. Growth is the answer.
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Because nothing grows an economy like allowing monopolies to crush small businesses and innovation, allowing giant banks to scam consumers and allowing billionaires (“job creators”) to run everything.
Tax cuts can boost economic growth.
We know, we know. So let’s dig further into this idea.
“After that you pay 10 percent as a flat tax going up”, he continued. A roughly equal share, 35 percent, were uncertain.
Simplicity was at the heart of several candidates’ proposals to flatten the tax code to a single bracket, a so-called “flat tax” that has been floated with several variations.
And even then, it can’t just be any spending cuts – it has to be cuts to “unproductive” spending.
The tax-reform landscape is getting crowded.
It’s not just Gale. “It maintains the current child tax credit and expands and modernizes the earned-income tax credit, with greater reforms to prevent fraud and encourage marriage”.
Take Cruz’s tax plan, which might be the most regressive and irresponsible one yet.
The Republican Party woke up new and fresh, and ahead of the curve, yesterday morning, leaving the Democrats stale and old back in the 20 century (Keynesian 1930s), if not the 19 (1870s, when Marx was new and cutting edge). The candidates defended their plans to simplify the tax code.
In a 2014 column in USA Today, Cruz called for abolishing the Internal Revenue Service along with imposing a national flat tax.
And that’s a weakness of static scores – policies have effects.
Or look at the Tax Foundation. They have chiefly relied on cliches, buzzwords and attempts to prove which of them most disdains President Barack Obama or Hillary Clinton. That’s not quite as expensive as Jeb Bush’s plan, which would cost about $1.6 trillion, according to another dynamic estimate.
“[A tax cut] won’t pay for itself”. Not only would that address my concern about enabling the spending proclivities of statists in the future, but I also think Social Security reform is more feasible when the system is financed by the payroll tax.
Analysis of six decades of data found that top tax rates “have had little association with saving, investment, or productivity growth”. He also would eliminate the estate tax, which is paid by only 0.2 percent of the wealthiest families. Given the way these plans work, about the only way to have them avoid looking like reverse-Robin Hood schemes is to exempt a few of the households at the bottom of the income distribution from any federal income tax.
But here’s the part of Cruz’s plan that raises a red flag.
“[Lower revenue] means they must be claiming they’re willing to fix it on the other side of the budget”, Holtz-Eakin said. Deducting a significant revenue stream by cutting taxes on the richest Americans without somehow replacing it means that there will ultimately be a gap.
Or maybe we’re taking candidates’ tax plans too seriously. On taxes, however, they stopped debating one another and started debating reality. “They’re campaign plans. They’re never like legislation”.
Candidates are presenting their dream worlds of fiscal policy, he says – the way the US would operate if they could get everything they wanted through Congress (which won’t happen). They also completely ignored any problems that their very own proposals would cause.
Candidates tend to oversimplify the relationship between tax cuts and economic growth.
Presidential candidates Carly Fiorina and Sen.
Email from Ben Carson campaign.
In this October 28, 2015, photo, Republican presidential candidate…
“Taxes and the Economy”.
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If you ask them, they’ll reply that Bush wasn’t true to conservative economic orthodoxy because he didn’t cut the size of government. “Every week new businesses are coming here to escape New York and Connecticut”. We’re going to bring jobs back from Japan, we’re going to bring jobs back from China, we’re going to bring, frankly, jobs back from Mexico where, as you probably saw, Nabisco is leaving Chicago with one of their biggest plants, and they’re moving it to Mexico.
