Elections

Ted Cruz: Abolish The IRS

[crscore]Ted Cruz[/crscore] wants to abolish the IRS by instituting a 10% flat tax on individual income and establish a 16% flat tax on all business income.

Appearing on The Hugh Hewitt Show on Monday, Cruz articulated the central aspect of his tax plan which is “a simple flat tax and so for a family of four, the first $36,000 in income you pay zero taxes.”

“Zero income tax, zero payroll tax, zero nothing,” Cruz explained. “Beyond that, everyone pays a flat 10%. And that applies across the board so that the hedge fund billionaire pays the same rate as the secretary instead of paying less as they often do now.”

For business, Cruz argued for a 16% flat tax. He explained “it applies to all businesses, Whether giant corporations or small mom and pops. And it simply, it is business revenue, net capital investment and expenditures. And those two taxes together fund the entire tax system.”

Cruz said, “One of the great advantages of the business flat tax right now you have giant corporations that have armies of accountants and lobbyists, that sometimes end up paying little or no taxes. With a 16% business flat tax, every company pays the same tax rate. It fair across the board, it applies uniformly to everyone.”

When asked about the revenue impact, Cruz argued his tax plan “is not revenue neutral.”

“This is a $3.6 trillion tax cut. So it is a tax cut from current rates. When you factor in economic growth, and over ten years this ends up reducing tax revenue about $760 billion, so it is less than a trillion, it is in terms of the impacts on the budget, much, much smaller than many of the other plans introduced by other candidates.”


Cruz though emphasized his tax plan’s “growth affects. The Tax Foundation shows that this 10% flat tax which allows you to abolish the IRS and move to a simple flat tax would produce 4.9 million new jobs over the next decade. That it would increase capital investment by 44% over the next decade.”

“Wages would go up and critically, for every single income bracket, from the very poorest to the very richest, every income decile would see at least 14% increase in after tax income,” claimed Cruz. “Which to put specifics on it, if you’re a single mom, you’re making $40,000 a year, struggling to provide for your kids, a 14% increase means an additional $5600 a year after taxes.”

“That is real money to transform the ability for you to provide for your family,” Cruz said.  “And I think it’s why, a simple 10% flat tax that abolishes the IRS is such a powerful growth machine.”

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