Texas Senator, and now presidential candidate, Ted Cruz is a supporter of radical tax plans that would dramatically increase taxes on poor and middle class Americans in order to pay for huge tax cuts for the wealthiest Americans. While he has not clearly established which he favors more, Cruz has endorsed both the creation of a flat income tax and a bill that would replace the progressive income tax system with a national sales tax, a plan misleadingly called the "Fair Tax."
While Ted Cruz may portray himself as wanting to lower taxes, the reality is that under the tax plans he has endorsed, the overwhelming majority of Americans would likely see their taxes go up considerably. Looking at the "Fair Tax," an Institute on Taxation and Economic Policy (ITEP) study found that the bottom 80 percent of taxpayers would see their federal taxes go up by about $3,200 on average annually. In contrast, ITEP found that the top 1 percent of taxpayers would receive an average annual tax cut of $225,000.
On the flat tax, Cruz has not yet spelled out a specific plan that he would like to see enacted, but it's unlikely that any plan he proposed will be significantly better than the extremely regressive flat tax proposals that have been offered in the past. For example, an ITEP analysis of Senator Arlen Specter's flat tax proposal found that the bottom 95 percent of Americans would see their annual taxes increase by $2,900 on average, while the top 1 percent of taxpayers would see their taxes decrease by $210,000 on average.
When speaking about the tax system, Cruz has also peddled a patently irresponsible promise to abolish the IRS, without specifying how our country might go about collecting tax revenues (including Social Security and Medicare taxes) without a revenue collection agency. Even though much of Cruz’s rhetoric is likely bluster and contains factual inaccuracies, it's still dangerous demagoguery.
Cruz's approach on taxes is so unfair that even some conservatives suspect that it will not prove politically popular. Making this point, Pew Research recently found that even 45 percent of Republicans believe some wealthy people don't pay their fair share in taxes, meaning a substantial portion of the Republican primary voters may not be able to stomach the massive tax breaks for the wealthy that Cruz is advocating.
Looking forward, here's hoping that we see other presidential candidates reject Cruz's regressive tax approach in favor of tax reform ideas that ensure that the rich and profitable corporations are paying their fair share.