Ted Cruz spent a fair amount of time discussing his new tax plan in detail with Larry Kudlow on his radio show today.
The tax discussion begins around the 6 minute mark so skip ahead if you don’t have a ton of time:
You can read more in depth about his simple flat tax plan here, but here are the highlights:
Under the Simple Flat Tax, the current seven rates of personal income tax will collapse into a single low rate of 10 percent. For a family of four, the first $36,000 will be tax-free. The Child Tax Credit will remain in place, and the Simple Flat Tax Plan expands and modernizes the Earned Income Tax Credit with greater anti-fraud and pro-marriage reforms. As a result, the Simple Flat Tax will ensure that low- and middle-income Americans have greater opportunities – not only through minimal taxes, but also through better, high-paying jobs that the Simple Flat Tax will generate. Under the plan, deductions for charitable contributions and mortgage interest payments are preserved.
The IRS will cease to exist as we know it, there will be zero targeting of individuals based on their faith or political beliefs, and there will be no way for thousands of agents to manipulate the system.
For businesses, the corporate income tax will be eliminated. It will be replaced by a simple Business Flat Tax at a single 16 percent rate. The current payroll tax system will be abolished, while maintaining full funding for Social Security and Medicare.
The convoluted tax code will be replaced with new rules of the game – so simple, in fact, that individuals and families could file their taxes on a postcard or phone app. The Death Tax will be eliminated. The Alternative Minimum Tax will be eliminated. The tax on profits earned abroad will be eliminated. And of course, the Obamacare taxes will be eliminated. Also gone will be the unending loopholes in the current code, the stacks of depreciation schedules for businesses, and the multi-tiered rates on income and investments. Under the Simple Flat Tax, the Internet remains free from taxes.
The results will be truly dramatic. According to the well-respected Tax Foundation, the Simple Flat Tax will deliver an economic boost of tremendous magnitude. In the first decade, the Simple Flat Tax will:
- Boost Gross Domestic Product by 13.9 percent above what is currently projected.
- Increase wages by 12.2 percent.
- Create 4,861,000 additional jobs.