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Presidential Issues: Taxes


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Ted Cruz’s VAT Plan Is A Raw Deal For Middle Class Families

January 19, 2016

By Ryan Ellis

[My tax plan] gives every American a simple, flat tax of 10%. Marco [Rubio's] top tax rate is 35%. My tax plan enables you to fill out your taxes on a postcard so we can abolish the IRS. Marco leaves the IRS code in with all of the complexity. We need to break the Washington cartel, and the only way to do it is to end all the subsidies and all the mandates and have a simple flat tax. The final observation, [Marco] invoked Ronald Reagan. I would note that Art Laffer, Ronald Reagan’s chief economic adviser, has written publicly, that my simple flat tax is the best tax plan of any of the individuals on this stage because it produces economic growth, it raises wages and it helps everyone from the very poorest to the very richest.

–Senator Ted Cruz
6th GOP Presidential Debate
January 14, 2016
North Charleston, South Carolina

Which tax plan is better for middle class families: Ted Cruz’s flat tax and VAT, or Marco Rubio’s more conventional tax relief package?

Let’s begin by defining “middle class family.” I and most people would define that as a median-income (half make less, half make more) family of four with two minor children. The Census Bureau says that such a family makes about $72,000 per year.

For the sake of simplicity, let’s make this vanilla family even more vanilla. All of their income is wages. Their taxable wages are also their gross wages. They, like 70% of tax filers, claim the standard deduction (so no mortgage interest deduction or charitable deduction).

Let’s evaluate this vanilla, plain Jane, very boring family under three scenarios: current tax law, the Rubio plan, and the Cruz plan.

Read the full article at Forbes.com: Ted Cruz's VAT Plan Is A Raw Deal For Middle Class Families

Issue Categories : Marco Rubio, Taxes, Ted Cruz