Certainly if either is elected, their tax plans would need significant revision, if only to sharply reduce likely revenue losses.įor now, however, both candidates are effectively signaling something about how they see the world. The Cruz plan is more of a bet that cutting taxes for business and the wealthiest will massively boost GDP growth with resulting income gains broadly shared. Bush passed tax cuts that improved growth incentives and provided broad tax relief. Both presidents Ronald Reagan and George W. In this way, the Rubio plan is in the tradition of politically successful GOP tax reform. As the supply-side wing of the GOP sees it - such as the Wall Street Journal's editorial page - every dollar not 'spent' on lowering top rates is a dollar wasted. According to Tax Foundation models, the Rubio plan 'provides the largest benefits to the lowest-income Americans.' For instance: The bottom tenth of households would see after-tax incomes rise by 44 percent, and 56 percent when accounting for faster economic growth. Second, Rubio would expand the use of tax credits to funnel immediate tax relief to working class and low-income voters. First, Rubio lowers the top income tax rate less than any other GOP candidates, to 35 percent from the current 40 percent. If and when the Cruz counterattack comes, it seems likely to focus on two aspects of Rubio's tax plan.

As Grover Norquist of the anti-tax group Americans for Tax Reform pointedly tweeted: 'VAT is a French word for Big Government.' VATs have long been anathema on the right due to concerns they would give government an additional revenue stream - Cruz would combine his VAT with a 10 percent flat income tax - and that they are effectively hidden from voters. Rubio was first to engage, with an attack Monday on the Cruz plan as an 'intentionally sneaky' idea that could lead to 'a dangerous expansion of Washington's power.' What Rubio is referring to is a feature Cruz calls a 'business flat tax.' But it is really a 16 percent valued-added tax somewhat similar to what's common in many other advanced economies. But there are key differences, and it is over those differences that their tax war will be waged.

And the richest Americans would certainly see much lower tax bills. Cruz and Rubio have each presented plans that would lose trillions over the next decade, assuming no strong economic feedback.

Ted cruz flat tax