Tag Archives: Tax Reform

Is what Ted Cruz does in the Senate relevant to you?

Ted and Heidi Cruz have a plan to simplify the tax code
Ted and Heidi Cruz have a plan to for tax reform

Sometimes, I talk to rank and file Christians and see what they are interested in. Sometimes, they are interested in parenting, sports, movies and the same sort of stuff that non-Christians are interested in. Sometimes, they are interested in Bible study and theology, and maybe even philosophy of religion. But only rarely are they interested in apologetics and public policy. However, public policy is very important to Christians, because it affects how we work, how much we earn after taxes, and how much freedom we have to spend our money as we see fit. If you have Kingdom of God goals for your life as a Christian that are different from the ordinary minimal life goals of a non-Christian, then public policy is very important to you.

With that said, education has to be one of the most important areas that Christians are concerned about. Not only do we not want our children to be taught lies, but we also want them to be taught marketable skills that will allow them to have an influence as a Christian. If public schools are not doing a good job at both tasks, then we need to get the money we were forced to pay in taxes for them back, so we can make better choices about education.

The Washington Examiner reports on what conservative Texas senator Ted Cruz has done lately that will be interesting to Christians who are thoughtful about how their children are educated.

Excerpt:

Parents would get new federal tax breaks for sending their children to private or religious schools or teaching them at home if the final Republican tax overhaul bill becomes law.

For that, they can thank Sen. Ted Cruz, R-Texas, who offered the original amendment to extend 529 college savings plans to grade school and high school, including costs for homeschooling.

Cruz’s amendment was the only one, setting aside manager’s amendments, to be added on either chamber’s floor. It passed as Republicans moved their bill through the Senate in the closing hours of Dec. 1. Cruz got an assist from Vice President Mike Pence, who cast the deciding vote in favor of the amendment after Republicans Lisa Murkowksi of Alaska and Susan Collins of Maine balked at the measure.

The amendment, which would allow $10,000 per child to be distributed from tax-privileged 529 savings plans each year, was included in Friday’s joint House-Senate conference bill. It would represent a tax cut of about $500 billion over 10 years, according to Congress’ Joint Committee on Taxation.

With the Cruz amendment’s inclusion, passage of the bill would represent a major advancement for school choice at the federal level.

The House version of the legislation contained a similar measure. It also included a noteworthy provision that would have permitted parents to open 529 accounts for unborn children. That language, which pro-abortion rights supporters had decried as an attempt to restrict abortion through the tax code, didn’t make it into the final bill.

One of the things that disappoints me about Donald Trump is that he does so little to persuade others to adopt conservative positions. Instead of being reasonable and using evidence, he is more likely to take to Twitter to get into a third-grade-level mocking match with people who disagree with him. It is true that he has done some conservative things, like reducing regulations, nominating great judges, and so on. But a great communicator creates consensus by being persuasive. You might not be able to persuade the radical leftists, but you have to be able to persuade at least some of the moderates. Ted Cruz has a much better record of being persuasive on policy issues than Donald Trump. And that’s probably because Ted Cruz has experience debating in college, and made it through Harvard University law school as an open conservative. He was considered brilliant by his progressive law professors, even though they didn’t agree with him.

We’re better off – from a public policy point of view – when we elect people who know how to be persuasive on public policy issues. Clowning around is entertaining, but it doesn’t get the wall built, and it doesn’t get Obamacare repealed. You have to be a better debater to get those kinds of things done.

Ted Cruz’s plan to lower taxes and simplify the process for filing tax returns

How to get kissed: Heidi Cruz helping her husband
How to get kissed: Heidi Cruz helping her husband

Ted Cruz is very upset with the IRS for discriminating against conservative groups and Christian groups in order to get Barack Obama re-elected in 2012. So, he’s come up with a plan to drastically reduce their influence – and their cost to taxpayers.

Here he is talking about the plan with Megyn Kelly on Fox News.

And he has posted something about the plan on his web site:

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.

[…]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.

Simple.

The Tax Foundation, which is the leading non-partisan think tank that deals with the issue of taxation, scored Cruz’s plan.

They say:

  • 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.

  • According to the Tax Foundation’s Taxes and Growth Model, the plan would significantly reduce marginal tax rates and the cost of capital, which would lead to a 13.9 percent higher GDP over the long term, provided that the tax cut could be appropriately financed.

  • The plan would also lead to a 43.9 percent larger capital stock, 12.2 percent higher wages, and 4.8 million more full-time equivalent jobs.

  • On a static basis, the plan would cut taxes by 9.2 percent, on average, for all taxpayers.

  • Accounting for economic growth, all taxpayers would see an increase in after-tax income of at least 14 percent at the end of the decade.

They conclude:

Senator Cruz’s tax plan would significantly alter the federal tax code. It would completely repeal the corporate income tax and all payroll taxes and enact a 10 percent income tax and a 16 percent “business transfer tax” or value-added tax. These changes to the tax code would increase the incentives to work and invest and would greatly increase the U.S. economy’s size in the long run, leading to higher incomes for taxpayers at all income levels. The plan would also be a large tax cut, which would increase the federal government’s deficit by over $3.6 trillion on a static basis. Accounting for the growth caused by the plan, federal revenues would decline by $768 billion over the next decade.

The non-partisan The Hill says that another major think thank for fiscal conservatism also likes Cruz’s plan:

Ted Cruz’s tax plan would cost less and stimulate the economy more than Donald Trump‘s, a recent analysis found.

“Of the two proposals that we have examined so far, those by Trump and Cruz, we find the Cruz proposal to be the better of the two,” said David Tuerck, executive director of the Beacon Hill Institute and senior fellow at the National Center for Policy Analysis. The free-market groups released a report comparing the economic effects of the tax plans from the two Republican presidential candidates.

[…]Cruz’s plan would also increase business investment and personal income more than Trump’s plan would, the report found.

I want a higher personal income, and I want more money invested into the business that employs me – so I can keep my job, or maybe find a better one. It’s very important to my life plan that I be able to earn money, and keep what I earn. I have a use for that money, whether I marry or not. And that use is not to give it to the government so they can buy people condoms and abortions in exchange for their votes. I have a better plan for the money I earn than what a secular government wants to do with it.

Now, Ted Cruz will have to come up with $768 billion in revenue to balance his plan, but that’s why he has promised to abolish or significantly reduce FIVE government departments. Don’t worry, they aren’t the useful ones. We have too much government, and we can get rid of some, and return the money to the people.

Related posts

American Spectator praises Australia’s bold new conservative leader

Tony Abbott, Prime Minister of Australia
Tony Abbott, Prime Minister of Australia

Well, I think we can get some encouragement from this article from the American Spectator.

Let’s take a look at his policies and appointments:

On economic policy, his government has moved in the opposite direction of those who favor Dodd-Frank-like behemoth approaches to the financial industry. Instead it’s opted to simplify regulation. As the minister responsible for the reform bluntly pointed out, “no amount of legislation will ever be a guarantee against another Storm Financial.” Indeed it’s often excessive regulation that creates opportunities for financial shenanigans by industry insiders.

Regarding the welfare state, Abbott’s minister for Social Security, Kevin Andrews (another conservative politician-thinker), has announced a major overhaul of a welfare system that was starting to drift in a distinctly European-direction. Predictably the left are up in arms. But so too are those rent-seeking Australian businesses who now find themselves dealing with a government uninterested in subsidizing them. That’s nothing, however, to the fury that greeted Abbott’s disbanding of the climate-change bureaucracy established by the preceding Labor government.

[…]The first sign of Abbott’s seriousness about obstructing the left’s long march through the institutions was his government’s appointment of the policy-director of the center-right Institute of Public Affairs to the nation’s Human Rights Commission. This was widely seen as the beginning of an effort to re-balance an organization long criticized as monolithically left-wing. Since then Abbott has indicated that major changes are coming to the ABC: Australia’s government-funded institutional — and ideological — equivalent of the BBC.

[…]Along the same lines, Abbott’s education minister, Christopher Pyne, has initiated a review of the national curriculum implemented by the previous government. A moment’s glance at the curriculum’s treatment of history soon illustrates the extent to which it seeks to downplay Australia’s indisputably Western heritage. In the words of Sydney’s Cardinal George Pell, “Europe, Britain and the United States are mentioned 76 times, while Asia is referred to on more than 200 occasions.” This disparity is odd because although Australia is certainly in Asia, no objective observer could say that Australia is “of” Asia. Moreover, while Australian students learn about “Gaia” and other deep-green fantasies in grade 9, many Australian universities find they need to put the same students through remedial English classes once they begin college.

Then there are Abbott’s initial steps on the international stage. Take, for instance, his recent remarks at Davos. Much of the address was devoted to pushing a strong free trade agenda and insisting that governments should let business do what it does best: promote lasting economic growth. “After all,” Abbott said, “government doesn’t create wealth; people do, when they run profitable businesses.”

In the same speech, however, Abbott made the conservative point that economic prosperity and freedom can’t be sustained in a value-neutral world. Nor did Abbott shy away from relentlessly pressing one of the most important moral arguments for free trade articulated long ago by Adam Smith: that economic freedom, combined with the right institutions, radically reduces poverty faster than any other approach. “No country,” Abbott added, “has ever taxed or subsidized its way to prosperity.”

All in all, the address added up to a solid integration of sound economics with conservative principles. That’s what makes Abbott different from, say, Canada’s Stephen Harper or Spain’s Mariano Rajoy. Abbott happily engages in the indispensable task of moral suasion in favor of conservative positions. What’s more, he’s quite good at it. With his rare combination of plain-speaking and intellectual substance, Abbott makes conservative ideas sound, well, reasonable to the average voter.

Now, I personally thought that prime minister Stephen Harper of Canada was the best leader of any nation out there, but I had not been following Australian politics as much as I should be, and now I think I’ll give the crown to Abbott. He seems to have a good fusionist view that integrates economic policy and social policy, and that makes him better than Harper, in my view. I would like to see Abbott flex his muscles on foreign policy, as well. Something to look forward to.

Conservative Christian Tony Abbott wins majority in Australia

Tony Abbott, future Prime Minister of Australia
Tony Abbott, future Prime Minister of Australia

Timothy Stanley of the UK Telegraph reports that Australia has elected a Stephen Harper of their own.

Excerpt:

Tony Abbott has won the Australian election – a blow not only to the Australian Labor Party but to Left-wingers everywhere who presumed that he was too “Neanderthal” to win. Well, us Neanderthals will be having a barbie tonight and sculling some beers to celebrate. “Good on yer, mate!”

Abbott won for two reasons. First, the Australian Labor Party is going through a long-term identity crisis. The ALP was once the party of the working man (and Sheila) but in recent years it’s succumbed to the worst aspects of factional politics, becoming a magnet for liberal pressure groups desperate for their slice of the taxpayers’ pie. The party contained plenty of factions in the past but it always managed to steer a sensible middle course between them – so while it was the ALP in the 1970s that established Australia as an outward-looking, Pacific power it was also the ALP in the 1980s that recognised the need for economic reform and rejected protectionism. It’s the party of both Gough Whitlam and Les Patterson.

However, in recent years the Left gained an ascendance over the Right that undid that delicate balance. Under Gillard and Rudd, the ALP “bought” off Australia’s metropolitan elites by embracing issues like gay marriage and the green agenda – the latter threatening the livelihoods of ordinary Australians trying to drill, mine and log their way through the global recession. It invested in silly, expensive projects that turned into giveaways to client companies and unions. And it displayed all of its internal bickering in public, reducing national politics to student union shenanigans. The ALP is now severed from the base that it once represented so well, leaving the ordinary blokes and blokesses looking around for something new.

[…]On the quiet, Abbott has picked up some of the politics that the ALP abandoned. He is said to be a devotee of BA Santamaria, the Catholic thinker who tried to build a Christian Democratic movement that combined social justice and social conservatism. Abbott’s conservatism is plain to see: he rejects doctrinaire environmentalism and favours a far freer and competitive market than the ALP’s clients would ever tolerate. But he also has Santamaria’s concern for social justice: Abbott wants to introduce a scheme that would pay for parental leave to encourage mothers and fathers not only to spend more time with their children but to have more of them, too. Dig beneath that hard man image and you’ll find a politician who is considerably softer and complex. Whereas some Western conservatives seem to be entirely motivated by the desire to win (Romney, Cameron), Abbott has a philosophy and – almost unique in our materialist age – a theology.

This puts him in the George W Bush, Stephen Harper compassionate conservative tradition – the tradition that tends to attract the most votes. For while British Tories might look at Abbott’s politics and language and sneer, they would do well to remember this important distinction. Tony Abbott wins elections; David Cameron has yet to do even that.

Congratulations, Conservative Coalition!

My previous post on Tony Abbott is here, if you want to know more about his policies.

Conservative coalition leader Tony Abbott leads by 6 points in latest Australia election poll

Tony Abbott, future Prime Minister of Australia
Tony Abbott, future Prime Minister of Australia

First the latest Nielsen poll results from the Australian Broadcasting Corporation (ABC).

Excerpt:

Latest opinion polls show a further drop in support for Labor two weeks out from an election, with one indicating the Prime Minister may struggle to hold his own seat.

The Nielsen poll, published on Fairfax websites, shows Labor’s primary vote has fallen two points to 35 per cent.

After preferences, that gives the Coalition a six-point lead – 53 per cent to 47 per cent.

If the results were replicated evenly across the country on election day, Labor would lose 10 seats.

The poll of 2,500 respondents has a margin of error of 2.6 per cent.

Meanwhile, a Newspoll published in The Australian newspaper, shows Prime Minister Kevin Rudd is behind the Coalition candidate, Bill Glasson, in his Brisbane seat of Griffith.

The poll of 500 voters shows Mr Rudd trails his opponent 52 per cent to 48 per cent on a two-party preferred basis. The margin of error is 4.4 per cent.

Another Newspoll of almost 1,400 voters in the Coalition’s eight most marginal seats in Queensland shows the Coalition’s primary vote has surged eight points to 54 per cent, while the ALP’s primary vote has slipped to 32 per cent.

It shows the Coalition has a commanding two-party preferred lead of 60 per cent to Labor’s 40 per cent.

Mr Rudd’s personal support has also fallen to 39 per cent, with 49 per cent of voters across the marginal seats preferring Opposition Leader Tony Abbott.

The Coalition is is composed of the Liberal party (which is actually the conservative party) and the National party (which is also conservative).

I found an interview with Tony Abbott posted on India Today, when I searched for some keywords related to his policies. I searched for a detailed policy-oriented interview in the mainstream media, but couldn’t find much. Strangely enough, the Australian media seemed to be more concerned with gaffes and fear-mongering about Abbott’s socially conservative views. It’s as if the mainstream media is aiming for some sort of Jon Stewart coverage of the election, instead of telling us about each candidate’s plans and proposals.

Here’s some of the interview:

1. What are your plans to grow the economy?
The Liberal Party understands that successful businesses generate prosperity for the entire community by creating jobs, investing in growth and earning important export income.

We will lower costs for Australian businesses by removing Labor’s carbon tax. We will take the shackles off Australian businesses by cutting $1 billion in red tape every year. And we will boost productivity by encouraging more people into the workforce with better child care and a paid parental leave scheme and we will build 21st century infrastructure.

The economy will be strengthened by a new lowered company tax rate of 28.5% from 1 July 2015. This builds on the Coalition’s track record of delivering real tax reform focussed on cutting and simplifying taxation in Australia. Our fully funded tax cut will restore confidence in the management of Australia’s economy and boost job creation and investment.

The Coalition will also build a more diverse, world-class economy – a 5 pillar economy – to unleash Australia’s real economic potential. In particular, we will build on our strengths in manufacturing innovation, agriculture exports, advanced services, world class education and research as well as boosting mining exports.

2. The cost of living has gone up in the recent years, how will the Liberals help families cope with the rising costs?
We will start reducing cost of living pressures for families by immediately scrapping Labor’s carbon tax, taking the pressure off rapidly rising electricity and gas prices.

The average family will be $500 better off next year alone and seniors will still keep their fortnightly pension and benefit increases- all without a carbon tax. We will not proceed with Labor’s FBT changes on cars. And we will restore the Private Health Insurance Rebate as soon as we responsibly can.

3. We have a lot of small businesses in our community, how will Liberals help them? 
The Liberal Party understands the small businesses are the real job creators in the economy, employing almost half of the workforce in Australia. We will reduce costs for every business by abolishing the carbon tax, directly reducing electricity, gas and transport costs. By removing $1 billion of red tape each year, small businesses will be able to put more time, effort and resources in their ‘real’ work, rather than complying with complex and unnecessary government requirements.

The Coalition’s paid parental leave scheme will mean small businesses would no longer be disadvantaged in the ‘war for talent’, attracting and keeping quality staff.

We will also ease expense pressures on small businesses by delaying the increase of compulsory superannuation contributions to 12 per cent by a further two years.

8. Do you have a view about same-sex marriage?
There are very strong feelings on both sides of this particular issue right now. I take a conservative position on it myself. I think that we should not lightly change something which has been this way since time immemorial. But I don’t believe that I can necessarily impose my view on society for all time, all I can do is candidly and honestly tell people what my view is. I support the traditional definition of marriage as between a man and a woman. Now I know that others dispute this, because I have lots of arguments inside my own family on this subject now. But my position, it’s always been clear, it’s always been consistent, and as long as I’m in the Parliament if the issue comes up that’s the way I will vote. Whether it remains for all time the Liberal Party, and the Coalition’s position, well that will be a matter for our party, for our Coalition if it were to come up in a future Parliament.

11. Everyone is talking about the Asian Century, what does this mean for the Liberals? What are your plans?
An important element of our economic plan for Australia is to strengthen our trading relationships with Asia, welcome investment from the region, boost our exports and deepen Australia’s knowledge of and engagement with countries in Asia. We recognise the rapid emergence of both China and India and the opportunities this will afford Australia in the future.

Specifically, we will take real action to increase economic activity by fast-tracking Free Trade Agreements with China and India amongst others.

We will strengthen our diplomatic relationship and trade ties with India and boost mining exports by exporting uranium to that country.

We will help Australians gain study and work experience, strengthen the ties with the region, learn to adapt behaviour to Asian contexts and work more effectively with Asian governments.

The Coalition’s new Colombo Plan would encourage and support Australian undergraduates to study for part of their degrees in a university in the Asia-Pacific region, so promoting Australia’s deeper engagement with the region to the benefit of both.

It’s nice to see what policies a conservative would propose. We haven’t had much of that around here for a long time, have we?

The Australian election will be held on September 7th. I would appreciate it if my Australian readers can keep me informed about stories related to the election campaign.