November 2, 2015
The tax-reform proposal unveiled by Ted Cruz last week is a 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.