Ted Cruz on Taxes

Continuing with the theme of looking at the Presidential Candidates tax plans and health ideas I will now discuss Ted Cruz's plan.

Senator Cruz proposes a flat tax rate of 10% where a family of four will not pay taxes for the first $36,000 they make per year.  Additionally, Cruz's plan keeps the child tax credit, and expands the earned income tax credit to enable people to keep more money.  People will have a standard deduction of $10,000 and a personal exception of $4,000.  Also, deductions for charitable donations and mortgage deductions are kept as well.  The death tax, and the alternative minimum tax are eliminated.  Basically, Cruz wants people to be able to file their taxes without the need for an accountant.

Additional changes are the elimination of taxes on the internet, Obama Care taxes as it will be eliminated and the IRS will be eliminated and replaced. The payroll tax will also be eliminated, the tax that funds Social Security and Medicare, and replaced.  Instead of the payroll tax, when people pay their regular taxes an amount is calculated from that amount to go toward people's Social Security and Medicare accounts.  The reason for this change is due to the fact that some people pay much more taxes here than they would under the regular tax system.  So eliminating this actually saves people money.  On top of all this, Cruz calls for the creation of a Universal Savings Account (USA).  The USA allows all Americans to save up to $25,000 yearly pre-taxed (not taxed till taken out).  A USA's money can be used for anything without restrictions and is designed to help people save enough money to afford to buy a house or a car or anything for that matter.  (Note: Here too like with Carson's HEA, I would like this account to be interest bearing so that people can earn more for saving their money).

On the business tax front, the taxes on Businesses will be lowered from 35% to 16%.  This too will be a flat tax, and businesses will be able to deduct expenses such as equipment, computer costs and other business expenses.  Any exports will be untaxed, but imports will all be equally taxed at the 16% rate.  Additionally taxes on profits earned abroad for both individuals and businesses will be eliminated.  

Final Thought:  Overall a good tax plan.  It allows us to keep more of our money and has an excellent business tax plan.  The USA idea works well as it aids people in saving money they otherwise would potentially have a hard time saving.  Again, like Carson's HEA, Cruz's USA can aid people in paying a lower amount of taxes.  Unlike Carson though Cruz keeps more deductions/credits and everyone is taxed at the same rate regardless of income.