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Cruz Tax Plan Would Cost $8.6 trillion, Second Only to Trump

Fenton said:
I think the left calls that " trickle down ".

They oppose on principle any strategies that inventize Private sector investment and that includes Tax cuts.

No they think you grow economies by increasing taxes, increasing Govt spending...debt ( Stimulus to increase aggregate demand ) increasing the regulatory burden on bussineses, inflating energy prices, growing the Public sector, empowering Unions and mandates on private bussineses that increase their cost and that Ofcourse includes a higher minimum wage.

They're absolutely lost when it comes to growing market based economies successfully.

" Trickle down " doesnt work but stimulus does .....Lol
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Agreed. I think that the problem is that the right and the left have different goals for the economy- some want a socialist economy and some want capitalism. I think that is why it is so rare to find common ground with people on here.
 
rocket88 said:
Still, I think that we're talking about a lot of money even if the numbers don't add up to 8.6 trillion.
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$76.8 Billion a year is a lot of money, agreed. But it is not the budget buster being now claimed.
 
digitusmedius said:
https://www.washingtonpost.com/news...would-cost-8-6-trillion-second-only-to-trump/

Big question, as usual, is: are the American people really stupid enough to buy this snake oil for a 3rd time in the last 36 years? At least republicans don't even pretend to care about deficits and skyrocketing debt anymore although I'm sure they'll keep trying to get other people to think they do.




And, of course, there's always a sleight-of-hand in every republican promise of a middle class tax cut:
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I can't really tell by your post... but do you believe the deficit/debt actually matters?... yes or no?
 
MrT said:
I would point to the past few years of performance for the EU compared to the United States as some evidence to support your final assertion.
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Lol.... Oh noes, austerity !! That reminds me of something.

I remember watching a Fox News round table with Sally Crone ( I think that's her name ) sitting next to Charles Krauthamer.

They were discussing Detroit's impending Bankruptcy and Sally Crone mentioned that " austerity " would be the worst possible solution.

Krauthammer just sat there, rolled his eyes and reminded her that Detroit spent millions more than they took in in revenue for 10 years.

Hillarious. Sally had no idea what she was talking about, she was there to parrot nonsensical left wing talking points.
 
Thrilla said:
I can't really tell by your post... but do you believe the deficit/debt actually matters?... yes or no?
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Yep. There are fiscal and economic reasons why zero debt is not desirable but debt reduction definitely is. We've lowered much higher debt (debt per GDP; after WWII and it was with high marginal tax rates and paid-for government spending). And we started debt reduction in the late 90s then Bush II came along. We're already well on our way to doing so again with steadily declining deficits so now is not the time (and there is never a time) for drastic tax cuts which again will benefit the wealthy far more than anyone else and will certainly lead to large deficits again.
 
Socrates1 said:
What are the democrats offering ? Bernie 19 plus trillion !!! Why is it so hard for libs to understand taxes drive businesses AWAY ! What has NAFTA and the new and improved TPP gotten American workers ? We are seeing more and more businesses setting up shop in tax friendly Countries . Democrats are wasting trillions on programs that do nothing but enable more and more lazy couch zombies . Just look at what the democrats have to offer as their BEST and brightest ; Hiliary and Bernie , one happens to be a liar and criminal and the other an angry old commie . My God !:roll:
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Well, Bernie has offered any specific numbers so your "19 trillion plus" is pure BS. Bernie is the only candidate who's been honest to say that he will raise taxes to pay for what he's proposing. Republicans always promise they can spend more and it will all "pay for itself" in some fantasy world they live in. You'd better hope your god is a forgiving one for all the BS you shovel out.
 
I hope they drastically cut taxes and spending.
 
MrT said:
Why do I have a tendency to believe the findings of the Urban Brookings Tax Policy Center over the Tax Foundation? Perhaps this column from Forbes would help to explain: Forbes Welcome

Here is the wikipedia article for Tax Foundation: https://en.wikipedia.org/wiki/Tax_Foundation

And for Brookings: https://en.wikipedia.org/wiki/Tax_Policy_Center

I find it interesting that the Tax Foundation has a section devoted to criticisms.
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From your first link:
I spoke with Laurence Kotlikoff , a professor at Boston University (and I’ve just noticed also a forbes.com contributor). He told me that he considers the Tax Foundation [dynamic] model simplistic.
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I believe that must be the greatest economic understatement of the past 36 years, at least. But I don't think "simplistic" is quite the right word, though. Other words are much more descriptive: fantastical, irrational, muddle-headed, childlike, moronic, nonsensical---to name just a few.
 
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Crovax said:
The only snake oil being peddled here is the notion that tax cuts "cost" anything, they can lower revenue but no actual cost is incurred by a tax cut. A completely disingenuous statement made by those with a little grasp on economic policy and even less grasp on mathematics.
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In a business, there are two ways to cut profits (or increase losses). You can increase expenses or you can decrease revenue. This dynamic is fully transferable to the economics of the government. You can increase deficits by increasing expenditures OR by decreasing receipts. If you cut taxes, you automatically decrease receipts (at least in the short run -- and likely permanently, depending on where you are on the Laffer curve), and thus increase deficits. Frankly, pal, I think you are the one without command of economics or mathematics.
 
ocean515 said:
Perhaps these Socialist Progressive think tanks can explain how lower tax revenues "cost" the government anything.
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Omigawd, where do you think revenue comes from, the money sky fairy?

I'm not a proponent of a flat tax, but the never ending blather from the left about tax cuts "costing the government" is ridiculous. The confirmation that people are stupid enough to believe such nonsense remains an uncomfortable reality of the times.
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The Reagan/Bush tax cuts account for at least $10T in the current national debt (Reagan, $3T, BushI $1T and BushII $6T and this doesn't count the interest on that $10T that is still accumulating and adding scores of billions of dollars yearly) . Knowing how you are so fact averse from our previous exchanges on global warming I realize that you're just simply incapable of knowing this reality.
 
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digitusmedius said:
Yep. There are fiscal and economic reasons why zero debt is not desirable but debt reduction definitely is. We've lowered much higher debt (debt per GDP; after WWII and it was with high marginal tax rates and paid-for government spending). And we started debt reduction in the late 90s then Bush II came along. We're already well on our way to doing so again with steadily declining deficits so now is not the time (and there is never a time) for drastic tax cuts which again will benefit the wealthy far more than anyone else and will certainly lead to large deficits again.
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so you're stuck in the same boat as conservatives... believing federal finances are the same as household finances.

ok then.... carry on.
 
upsideguy said:
In a business, there are two ways to cut profits (or increase losses). You can increase expenses or you can decrease revenue. This dynamic is fully transferable to the economics of the government. You can increase deficits by increasing expenditures OR by decreasing receipts. If you cut taxes, you automatically decrease receipts (at least in the short run -- and likely permanently, depending on where you are on the Laffer curve), and thus increase deficits. Frankly, pal, I think you are the one without command of economics or mathematics.
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Republicans since Reagan have given us the double whammy of reducing revenue (tax cuts) and increasing spending (military and unfunded wars). But does that stop current republican candidates from offering us the same **** cake again? Not a bit. In fact, they're promising an even worse recipe for their **** cake than their utterly failed predecessors gave us.
 
Thrilla said:
so you're stuck in the same boat as conservatives... believing federal finances are the same as household finances.

ok then.... carry on.
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That's sure a bizarre strawman, but not surprising. I'd love to see you justify coming to that conclusion from my comments. Please give it a try, just for ****s and giggles.
 
digitusmedius said:
Republicans since Reagan have given us the double whammy of reducing revenue (tax cuts) and increasing spending (military and unfunded wars). But does that stop current republican candidates from offering us the same **** cake again? Not a bit. In fact, they're promising an even worse recipe for their **** cake than their utterly failed predecessors gave us.
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Economists explain Jeb Bush Tax Plan.jpg
 
digitusmedius said:
https://www.washingtonpost.com/news...would-cost-8-6-trillion-second-only-to-trump/

Big question, as usual, is: are the American people really stupid enough to buy this snake oil for a 3rd time in the last 36 years? At least republicans don't even pretend to care about deficits and skyrocketing debt anymore although I'm sure they'll keep trying to get other people to think they do.




And, of course, there's always a sleight-of-hand in every republican promise of a middle class tax cut:
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I figure you progressives would LOVE a plan like this. Think about it, the corporation no longer gets to deduct the CEO's $475 Million salary and has to pay taxes on that amount whereas they get to write it off now. In fact there would no longer be an incentive to pay CEO's huge salaries. Isn't that a big chunk of what you folks want?
 
OpportunityCost said:
I have seen it argued here that the average corporate tax paid is only 16% with loopholes and whatnot. So if they pay a 16% VAT and a 10% flat tax, how are they paying less?

Please reconcile the two arguments for me.
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Who they? Corporations? Corporations don't pay the 10% income tax. They'll pay the 16% VAT.

To be clear, his "business flat tax" is complex, and doesn't operate like a federal sales tax. It's a tax on business revenues, minus capital expenditures and payments to other businesses (who count their buyers' revenues in their sales taxes).

So, it's not that everyone gets whacked with a 10% income tax, and pays 16% federal sales taxes on top of state/city sales taxes. (We should also note that the more income you have, the less goods and services people buy as a percentage of income; so even if we did set up a 16% sales tax, top earners would still end up with a lower effective tax rates than today.)

Cruz intends to repeal corporate income taxes and payroll taxes completely. The offsets from his VAT, including repatriated international taxes, are projected to break even. Once the transition and repatriations are over, corporations pay less taxes. I will admit the offsets there are more even than I originally thought, but after repatriation it's a bit less.


PS I know it will prove ruinous to Jackson Hewitt, H&R Block and the IRS, seems like a win-win to me!
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It won't be "ruinous" to tax preparers; the forms won't get much simpler. There will just be fewer deductions allowed.

The IRS won't be "ruined" either. They'll have the same job of checking and collecting taxes.

The loser is the American public. In order to break even with the lost revenue, Cruz would have to slash federal spending by 20%, or 10 times as much as from the sequestration in 2013. That alone will contract GDP by about 4%, which probably means Instant Recession, just add water -- and in case you missed it, recessions result in, wait for it, reduced tax revenues. (Alternately, the federal government can borrow more. Yaay!)

Plus, unless you are in the top 20% (i.e. household earns a minimum of $105,000 per year), you barely get a tax cut. 60% of the country will get a tax break of less than $1700. The top 20% get an average tax break of $35,000 per year. The top 1%, $407,000. The top 0.1%, a $2 million tax break.

See page 10: http://taxpolicycenter.org/UploadedPDF/2000612-an-analysis-of-ted-cruzs-tax-plan.pdf
 
Lutherf said:
I figure you progressives would LOVE a plan like this. Think about it, the corporation no longer gets to deduct the CEO's $475 Million salary and has to pay taxes on that amount whereas they get to write it off now. In fact there would no longer be an incentive to pay CEO's huge salaries. Isn't that a big chunk of what you folks want?
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Not really, no.

I want to make corporations more competitive. I'm willing to dissolve the corporate income tax and unburden corporations from the need to provide healthcare.

Where i draw the line is more FIT cuts that almost entirely benefit the wealthy. What that amounts to is a costly government handout to the rich. It's actually pure insanity, especially when we are concerned about debt, so i absolutely loathe how politicians have been bribed by the rich and the poor have drank the well-funded kool-aid propaganda that keeps the wheels on the crazy bus going round and round.
 
cpwill said:
Senator Cruz’s plan would cut taxes by $3.6 trillion over the next decade on a static basis. However, the plan would end up reducing tax revenues by $768 billion over the next decade when accounting for economic growth from increases in the supply of labor and capital and the much broader tax base due to the new value-added tax.

So.... no. Not 8.6 Trillion over the next decade :roll:
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Tax Foundation... lol

Their dynamic scoring model is basically accounting witchcraft, to make the tax changes they want to look good. Meanwhile, back in the real world, cutting taxes does not result in massive increases in GDP growth rates.

How's Kansas doin' lately?
 
Lutherf said:
I figure you progressives would LOVE a plan like this. Think about it, the corporation no longer gets to deduct the CEO's $475 Million salary and has to pay taxes on that amount whereas they get to write it off now. In fact there would no longer be an incentive to pay CEO's huge salaries. Isn't that a big chunk of what you folks want?
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A VAT-type plan could work, if it was structured well. Cruz's isn't all that bad, as it is close to revenue-neutral and makes things a little simpler.

The bigger issue with Cruz's plan is the flat tax, almost all of which benefits the wealthy. Yet again. Because, y'know, we need yet more income and wealth inequality in the US. Can't get enough of that!
 
Visbek said:
Tax Foundation... lol

Their dynamic scoring model is basically accounting witchcraft, to make the tax changes they want to look good. Meanwhile, back in the real world, cutting taxes does not result in massive increases in GDP growth rates.

How's Kansas doin' lately?
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In the real world, the static scoring model has proven itself repeatedly a failure, and often a grand failure. Dynamic scoring, when done carefully, is indeed more accurate.

People follow incentives. Failing to account for that is just a way of lying with math.

Or, hey. Let's tax businesses at 10,000% of profit. :) Deficit instantly solved, debt soon to follow.

A VAT-type plan could work, if it was structured well. Cruz's isn't all that bad, as it is close to revenue-neutral and makes things a little simpler.
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Broadly speaking, I also think that shifting some of our tax structure to sales from income could be wise policy. I agree with the critique, however, that Cruz is effectively hiding this tax, and think that it should be applied at the retail level so that people see what they are being taxed. Our tax system should be (generally) as transparent as possible.
 
Absentglare said:
Not really, no.

I want to make corporations more competitive. I'm willing to dissolve the corporate income tax and unburden corporations from the need to provide healthcare.

Where i draw the line is more FIT cuts that almost entirely benefit the wealthy. What that amounts to is a costly government handout to the rich. It's actually pure insanity, especially when we are concerned about debt, so i absolutely loathe how politicians have been bribed by the rich and the poor have drank the well-funded kool-aid propaganda that keeps the wheels on the crazy bus going round and round.
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I'm still not following. I've heard progressives for years telling me that the wealthy don't pay any tax. Which is it? How can you cut their taxes if they don't pay any to begin with?
 
Lutherf said:
I figure you progressives would LOVE a plan like this. Think about it, the corporation no longer gets to deduct the CEO's $475 Million salary and has to pay taxes on that amount whereas they get to write it off now. In fact there would no longer be an incentive to pay CEO's huge salaries. Isn't that a big chunk of what you folks want?
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Actually, the 'consolidated' or VAT tax, any point of sale tax is favored by true leftists as it is the fairest form of tax. It is only the American liberals who object, I suspect because it's being fronted by a staunch conservative.

If you think about it, when you take away personal income tax and replace it with a POS, the lion's share of the tax is paid by the wealthiest. What gets resistance (here and in Europe) is what is taxed. The best tax is universal, it costs the least to implement as it is across the board on everything. However, most societies refuse to be taxed on such things as prescription medication, food in grocery form, etc. But as soon as you start making exceptions, the cost of collecting the tax goes up, and the deeper you go into people's pockets the more likely you are to create a black market. Even worse, exemptions become political swords to wield.

So, it's a balancing act, and frankly I don't think Cruz has any idea of the problems in implementing a POS system to totally replace income tax. He sure hasn't learned from the mistakes made by his mother country. In Canada, every administration federal of provincial that has brought in or tried to change the VAT has gone down to defeat in the very next election. Here, the premier resigned two months after it went into effect.
 
Lutherf said:
I'm still not following. I've heard progressives for years telling me that the wealthy don't pay any tax. Which is it? How can you cut their taxes if they don't pay any to begin with?
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I can't speak to your strawman. I never claimed the wealthy don't pay ANY tax.
 
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