Tag Archives: Flat Tax

Is Marco Rubio right about his attacks on Ted Cruz’s business tax plan?

Texas Senator Ted Cruz
Texas Senator Ted Cruz

Here’s an article from Dan Mitchell of the Cato Institute, published with Forbes magazine. Cato economists are libertarians, so they are good at fiscal policy, but terrible at moral and social issues.

It says:

But here’s the part of Cruz’s plan that raises a red flag. He says he wants a “business flat tax,” but what he’s really proposing is a value-added tax.

His proposal is a VAT because wages are nondeductible. And that basically means a 16 percent withholding tax on the wages and salaries of all American workers (for tax geeks, this part of Cruz’s plan is technically a subtraction-method VAT).

Normally, I start foaming at the mouth when politicians talking about value-added taxes. But Senator Cruz obviously isn’t proposing a VAT for the purpose of financing a bigger welfare state.

Instead, he’s doing a swap, imposing a VAT while also getting rid of the corporate income tax and the payroll tax.

And that’s theoretically a good deal because the corporate income tax is so senselessly destructive(swapping the payroll tax for the VAT, as I explained a few days ago in another context, is basically a wash).

But it’s still a red flag because I worry about what might happen in the future. If the Cruz plan is adopted, we’ll still have the structure of an income tax (albeit a far-less-destructive income tax). And we’ll also have a VAT.

So what happens 10 years from now or 25 years from now if statists control both ends of Pennsylvania Avenue and they decide to reinstate the bad features of the income tax while retaining the VAT? They now have a relatively simple way of getting more revenue to finance European-style big government.

And also don’t forget that it would be relatively simple to reinstate the bad features of the corporate income tax by tweaking Cruz’s business flat tax/VAT.

[…]Notwithstanding my concern about the VAT, Senator Cruz has put forth a plan that would be enormously beneficial to the American economy.

Instead of being a vehicle for punitive class warfare and corrupt cronyism, the tax code would simply be the method by which revenue was collected to fund government.

Rubio ignored all of those details during the debate, and instead accused Cruz of bringing in a VAT tax that is the same as those in Europe, with no other taxes being lowered or eliminated to compensate. It’s dishonest, but he was probably hoping that Cruz would not have time to respond.

Here’s Cruz’s response from the debate last night:

In Rubio’s question, he deliberately misrepresented Cruz’s proposal by neglecting to mention all the taxes that Cruz would eliminate. Dan Mitchell mentioned them. I don’t understand why Rubio is smearing a fellow conservative with such attacks. Unless maybe Rubio is not a fellow conservative at all? I’ll be looking at that more next week.

This is not the first time that Rubio has tried to distort facts in order to smear Ted Cruz. Honestly, I used to have Rubio listed as my 5th choice, but he keeps smearing Cruz with dishonest attacks that are easily cleared up with a little knowledge from experts. I have therefore removed Rubio from my list of candidates.

Debate evaluations

Google Trends shows that the debate was essentially a showdown between Trump and Cruz, based on search engine traffic during the debate:

Google Trends analysis of search terms during Fox Business GOP primary debate
Google Trends analysis of search terms during Fox Business GOP primary debate

There are some reports out now on who did well in last night’s debate.

And The Weekly Standard has a new podcast up.

Republican senator Mike Lee introduces bill to cut taxes on parents

National Review reports on a new tax cut plan from Republican senator Mike Lee.

Excerpt:

Today at AEI, Senator Mike Lee of Utah introduced an idea that’s been missing in Congress for a long time: A conservative tax-reform plan that aims to improve opportunity and reduce the bias against families inherent in the U.S. tax code.

It would significantly simplify how individual income taxes work, and result in a large tax cut on families with children, especially married ones: The system would be reduced to just two brackets — 15 percent on all income below $87,850 (at which the rate currently jumps from 25 percent to 28 percent) and 35 percent on all income above that. Most interestingly, though, it would provide much more compensation in the tax code for raising children: “The centerpiece” of the plan, as Lee put it, is a $2,500 tax credit per child under the age of 16, which would reduce what parents owe in income taxes dollar-for-dollar, and if that’s reduced to zero, what they owe in payroll taxes, too. (The tax code currently provides a combination of a tax deduction for children, which only reduces the amount of one’s income that’s subject to the income tax and isn’t, for most couples, nearly as valuable per dollar, and a smaller tax credit.)

That represents a significant tax cut on a lot of middle-income earners, but a number of tax expenditures (deductions and credits) would be eliminated, and some would be smartly restricted — the mortgage-interest deduction, for instance, would be capped at $300,000 in principal, as Lee says, “focusing the deduction on the families and communities who need it the most.” He highlights a “new charitable deduction that would be available to all taxpayers,” which would be available to people who don’t currently itemize their deductions (lower-income Americans, for one). The “marriage penalty” would be eliminated, because the bracket sizes would now just be doubled for married couples (preserving a “marriage bonus” for many couples).

[…]The plan hasn’t been scored for its revenue effects, but it seems likely, overall, to reduce the receipts of the federal income tax slightly. Over the long term, though, while this isn’t the main intent, a rise in fertility and increased investment in raising children should go a ways to reducing America’s long-term fiscal gap (AEI’s Jim Pethokoukis likes to refer to such an idea as a “human-capital tax cut” — while, again, it’s about fixing a distortion in the tax code and not adding one, at the margins it’s a big tax cut for having children).

So often on this blog, I post articles critical of Democrats, but not much about what Republicans want to do. Here’s an example of what Republicans want to do.

Video: Dr. Ben Carson on the Sean Hannity show

I have no idea how long this will stay up on YouTube, so watch it now!

Here’s an earlier interview with Hannity as well. This is a good example of what you see on Fox News. Honest, long-format detailed explorations of the real issues.

My understanding is that HE IS open to running for President.

Related posts

Dr. Ben Carson’s story, and hour-long appearance Friday on Hannity

Two articles from the American Spectator about Ben Carson to provide background for his hour-long appearance on Hannity’s TV show Friday night on Fox News Channel.

First article from the American Spectator introduces Ben Carson.

Excerpt:

Dr. Ben Carson is fast becoming America’s Doctor.

And he will make an hour-long house call with Sean Hannity in a Hannity Special on Fox News Friday night.

Along with a handful of guests in an on-set audience, of which I will be privileged to be one.

Dr. Carson, of course, has been in the news lately for this speech at the National Prayer Breakfast. In which, with a surgeon’s precision, the good doctor deftly dissected both Obamanomics and Obamacare — with President Obama seated two seats away.

If you aren’t yet familiar with Dr. Carson you should make the time.

Here is a man whose single mother, one of 24 children — you read that right — married at 13, had two children (Ben and his brother Curtis), eventually finding out that her husband had an entirely different wife and family. Which is to say, he was a bigamist and soon departed from Ben’s family when the discovery was made by Ben’s mother. He was as well a man with an alcohol problem. Mom had a third grade education.

Not exactly an auspicious start for a young African-American kid in Detroit.

But Mom — that would be Sonya Carson — presented with her share of life lessons that every human being walking must face, was paying attention to her two boys. First, she set the example herself. Determined to avoid the welfare system, she worked “constantly,” Carson tells us. Her faith in God having her insist to her son, “Bennie, we’re going to be fine.”

No. she said, you cannot watch television all the time. She laid down a rule — one of many. Young Ben would not be allowed more than two or three TV programs a week. What he must do instead is read two books from the Detroit public library — and write book reports on each.

So began Ben Carson’s lifelong love affair with education — with reading. Dutifully, he would make the trek to the library, read the two books of his choice, write up book reports — and get them back from his mother with a check mark to acknowledge his work.

Did I mention that Sonya Carson couldn’t read? No matter — only much later would young Ben figure this out. In the meantime Ben Carson went from being called “dummy” by his fifth grade friends to a top student at Yale University not to mention the top of his class at the University of Michigan Medical School. And now one of the world’s most accomplished (not to mention famous) physicians, presented with the Presidential Medal of Freedom by President George W. Bush.

Second article from the American Spectator talks about why the left-wing media hates him. This one is by Dr. Paul Kengor of Grove City College. (H/T Ram)

Excerpt:

Liberals continue their hysteria over remarks made by Dr. Ben Carson at the National Prayer Breakfast last week. Carson, a prominent pediatric surgeon from Johns Hopkins University, dared to weigh in on healthcare — something he knows something about, and certainly knows better than Barack Obama. In the liberal mind, Carson committed a grave transgression; he had dared to disagree with Obama, and in Obama’s presence.

In a discussion of Carson’s moral effrontery, Candy Crowley, host of CNN’s State of the Union, asked her panelists whether they were offended by Carson’s comments. “He [Carson] was talking about the idea of, you know, weaving the Bible into some objections he appears to have with the president’s approach,” said Crowley, as if the president would never likewise do anything so outrageous. Count Democratic Congresswoman Jan Schakowsky among the offended. She told Crowley: “I think it’s… not really an appropriate place to make this kind of political speech and to invoke God as his [Carson’s] support for that kind of point of view.”

In truth, what the likes of Crowley and Schakowsky object to is the mere fact that someone publicly disagreed with Obama on healthcare, and especially in the context of faith. This was sheer blasphemy. For liberal Democrats, conservative Republicans are never permitted to use their faith to disagree; no, only liberal Democrats enjoy such freedoms. I could give a thousand examples illustrating the point; I’ve written entire books doing so. For now, however, here are some particularly salient examples involving Obama, liberals, and healthcare reform:

From the very first year of Obama’s presidency, the Religious Left (Obama included) incessantly claimed God’s support for their vision of healthcare reform. This was no surprise whatsoever, just as it was no surprise that the liberal press was not only not outraged but silently supportive. There was nary a whimper of protest from liberal journalists, let alone their usual howls (when a Republican cites his faith) of “separation of church and state!”

For instance, in August 2009, Obama addressed a “virtual gathering” of 140,000 Religious Left individuals. It was a huge conference call to liberal Christians, Jews, and other people of faith. Obama told them that he was “going to need your help” in passing healthcare reform. Christ-like, Obama penitently invoked a period of “40 Days,” a trial of deliverance from conservative evildoers. He lifted up the brethren, assuring them, “We are God’s partner in matters of life and death.”

Like a great commissioning, in the 40 Days that followed the Religious Left was filled with the spirit, confidently spreading the word, pushing for — among other things — abortion funding as part of an eternally widening “social justice” agenda. A group called the Religious Institute, which represented 4,800 clergy, urged Congress to include abortion funding in “healthcare” reform. To not help poor women secure their reproductive rights was unjust, declared the progressive pastors. As the Rev. Debra Hafner, executive director of the Religious Institute, complained, federal policy already “unfairly prevents low-income women and federal employees from receiving subsidized” abortions.

Watch him Friday night for the full hour of Hannity.

My previous articles on Dr. Carson: 1) his opposition to Darwinism and his persecution by Emory University, and 2) the National Prayer Breakfast speech that rocketed him to national fame.

Dr. Ben Carson holds Obama accountable for Obamacare and other bad policies

First, the video:

The Wall Street Journal had a response to this video entitled “Ben Carson for President“.

And this is what they said:

Whether this weekend finds you blowing two feet of snow off the driveway or counting the hours until “Downton Abbey,” make time to watch the video of Dr. Ben Carson speaking to the White House prayer breakfast this week.

Seated in view to his right are Senator Jeff Sessions and President Obama. One doesn’t look happy. You know something’s coming when Dr. Carson says, “It’s not my intention to offend anyone. But it’s hard not to. The PC police are out in force everywhere.”

Dr. Carson tossed over the PC police years ago. Raised by a single mother in inner-city Detroit, he was as he tells it “a horrible student with a horrible temper.” Today he’s director of pediatric neurosurgery at Johns Hopkins and probably the most renowned specialist in his field.

Late in his talk he dropped two very un-PC ideas. The first is an unusual case for a flat tax: “What we need to do is come up with something simple. And when I pick up my Bible, you know what I see? I see the fairest individual in the universe, God, and he’s given us a system. It’s called a tithe.

“We don’t necessarily have to do 10% but it’s the principle. He didn’t say if your crops fail, don’t give me any tithe or if you have a bumper crop, give me triple tithe. So there must be something inherently fair about proportionality. You make $10 billion, you put in a billion. You make $10 you put in one. Of course you’ve got to get rid of the loopholes. Some people say, ‘Well that’s not fair because it doesn’t hurt the guy who made $10 billion as much as the guy who made 10.’ Where does it say you’ve got to hurt the guy? He just put a billion dollars in the pot. We don’t need to hurt him. It’s that kind of thinking that has resulted in 602 banks in the Cayman Islands. That money needs to be back here building our infrastructure and creating jobs.”

Not surprisingly, a practicing physician has un-PC thoughts on health care:

“Here’s my solution: When a person is born, give him a birth certificate, an electronic medical record, and a health savings account to which money can be contributed—pretax—from the time you’re born ’til the time you die. If you die, you can pass it on to your family members, and there’s nobody talking about death panels. We can make contributions for people who are indigent. Instead of sending all this money to some bureaucracy, let’s put it in their HSAs. Now they have some control over their own health care. And very quickly they’re gong to learn how to be responsible.”

The Johns Hopkins neurosurgeon may not be politically correct, but he’s closer to correct than we’ve heard in years.

Here’s a bit more about the speech from the Blaze.

Excerpt:

One of the more unique speeches delivered at this morning’s National Prayer Breakfast came from Dr. Benjamin S. Carson, a world-renowned pediatric neurosurgeon at Johns Hopkins Hospital. Taking the stage before President Barack Obama’s faith-filled address, Carson spoke for more than 25 minutes, tackling issues ranging from education to personal responsibility. His keynote, while predicated upon the theme of Jesus Christ as his ultimate role model, also took a starkly political tone, advocating against some of the very policies the president has implemented.

At the beginning of his speech, Carson shared an intense disdain for political correctness. Without getting too specific on the issue front, he said that Americans should stop being afraid to speak up and defend their beliefs; he also encouraged people to respect the individuals they disagree with. Carson held little back, condemning political correctness as “a horrible thing” that is “dangerous,” as it hampers freedom of thought and expression.

“We’ve reached a point where people are actually afraid to talk about what they want to say, because somebody might be offended,” Carson said, noting the example of people refraining from saying “Merry Christmas.” “We’ve got to get over this sensitivity and it keeps people from saying what they really believe.”

Carson encouraged discussion about societal issues, also pointing out education as an essential conundrum the country needs to confront. He highlighted his own path from poverty to success, sharing very personal details about his parents and early family life and subsequently described the importance of helping students seeking to advance academically through his Carson Scholars Fund.

The speech took an interesting turn when the doctor cautioned that moral decay and fiscal irresponsibility can have dire consequences — even for powerful countries like America. Here, he became even more pointed and impassioned.

“I think particularly about ancient Rome. Very powerful — nobody could even challenge them militarily…they destroyed themselves from within,” Carson continued. “Moral decay. Fiscal irresponsibility.”

While he said America’s issues are dire, he was positive that the nation can fix its ways, as there are bright and innovative people who simply need to come together to address the problems at hand.

“And one of our big problems right now…our deficit is a big problem,” he said, as Obama watched him intently. ”Think about it — and our national debt — $16 and a half trillion dollars.”

I blogged about the Darwinish Inquisition and Ben Carson before. He has faced persecutions from the Darwinists because he has scientific concerns about evolution. If you need something to watch on a Saturday night, this is the speech for you.