Thread: Ted Cruz gets specific on 'abolishing the IRS'

Cruz campaign.

Ted Cruz gets specific on 'abolishing the IRS'

BY DAVID M. DRUCKER |
APRIL 27, 2015



Sen. Ted Cruz has been gunning to abolish the Internal Revenue Service since coming to Washington...LAS VEGAS — Sen. Ted Cruz has been gunning to abolish the Internal Revenue Service since coming to Washington two years ago.

To critics of the Texas Republican in Democratic and GOP circles, it sounds like bluster. The fiery rhetoric garners hearty applause from conservative audiences, particularly since revelations in 2013 that the IRS targeted Tea Party groups for extra scrutiny. But some federal agency is going to have to collect taxes, so Cruz's vow to shutter the IRS smacks of a politically motivated campaign promise rather than serious policy — at least to some.

In an interview with the Washington Examiner on Friday, the 2016 presidential candidate began to put some meat on the bones. Cruz, 44, explained how "abolishing the IRS" fits into his proposal, still being crafted by his team of economic advisors, for wholesale tax reform. This proposal, which Cruz plans to unveil later this year, is a key plank in his domestic agenda for economic growth that he would pursue as president

"When it comes to jobs and growth and opportunity, the two most effective levers that the federal government has to facilitate small businesses creating new jobs, are tax reform and regulatory reform," Cruz said late last week, during a 20-minute discussion while on a brief swing through Las Vegas. "I am campaigning on a flat tax that would allow every American to fill out his or her taxes on a post card that allow us to abolish the IRS."

Cruz said he envisions shifting the tracking and collection of federal taxes to "some much smaller division" of the Treasury Department. The senator said that replacing the current, complex tax code with a simple flat tax would eliminate most of the work the IRS needs to do, making the agency obsolete and "irrelevant."

In its purest form, a "flat tax" treats all taxpayers equally. Income is taxed at the same rate regardless of earnings or wealth, while allowing for no tax deductions or exemptions. But Cruz said his flat tax proposal might allow some deductions, possibly for popular write-offs like for charitable donations and mortgage interest charged on a primary residence, paid annually by homeowners.
"We will roll it out with precise details in the coming weeks or months," he said. "There are trade-offs to be had and we're right now internally having those debates, in terms of whether you have a couple of deductions or exemptions or not, at what rate the flat rate is set, what level of standard deductions and so those trade-offs we're currently debating."

Cruz said the theme of his campaign rests on restoring Americans' optimism for the future, as defined by three elements: "No. 1, bringing back jobs and growth and opportunity; No. 2., defending our constitutional liberties and No. 3, restoring America's leadership in the world."

The Texan emphasized that regulatory reform was just as important as tax reform in satisfying his top goal of igniting the economy and fueling job growth. Unlike his plans for tax reform, which would presumably require congressional sign-off, Cruz said he could pursue a significant amount of regulatory reform through his executive authority, and that he would do so aggressively during his first 100 days as president.

Cruz said that Washington has implemented reams of regulatory rules that executive branch bureaucrats wrote on their own, outside of the legislative process and without the approval of Congress. Accordingly, the senator, who has at times criticized President Obama for overstepping his executive authority, said that he would use his executive authority to roll many of these regulations back.
"One major area of unilateral steps concerns regulatory reform, the second half of job growth," Cruz said, explaining his views on where it's appropriate for a president to govern by executive action.

"There are a great many things that can be implemented unilaterally in the executive," he said. "The president, under Article II of Constitution, is charged with executing the laws. Many of the most burdensome rules coming from Washington come from the executive branch from unaccountable, unelected bureaucrats and if I'm elected president, one of the very top priorities is going to be to rein back those regulations, those executive orders, those rules from Washington that are burdening small businesses and killing jobs."

http://www.washingtonexaminer.com/cr...rticle/2563631

Ted, why are you talking about a flat tax on income? Why aren't you proposing the FairTax, HR 25 in the US House of Representatives and S 155 in the US Senate? You're a co-sponsor of this legislation which has already "worked out" all the details of equality and fairness, methods of collection, and the whole ball of wax? A flat tax on income is still a tax on income. It still requires citizens to report their wages, interest, dividends, and so forth and requires businesses to report all of theirs. Many of us want a consumption tax and elimination of the formerly unconstitutional income tax.

See Ted? You would get good press if you would talk about the FairTax which you support instead of this silly post card deal which anyone who has ever filled out a tax return knows is not possible if taxes are based on income, because most people couldn't even get their income source list on a post card, let alone attach their copies of earnings statements to it. It's not the rates that make the income tax complicated, it's the determination and treatment of income, dividends, interest, refunds, investments, and so forth, even if they're small.

Ted Cruz Is Right About Taxes

The Internal Revenue Code's headache-inducing complexity is a scandal.

Jacob Sullum | March 25, 2015
If you have not done your taxes yet, do not count on getting help from the Internal Revenue Service in answering any last-minute questions that may arise. The IRS estimates that only half of the anxious and bewildered taxpayers who call the agency this year will get through to a "telephone assistor," and those who do "could easily wait 30 minutes or more for limited service."

Those numbers reflect a deeper problem that Ted Cruz tapped into on Monday, when he announced that he is seeking the Republican presidential nomination. Although the Texas senator's dream of "abolishing the IRS" may be unrealistic, especially given the tax reform plan he favors, he is right to focus on the Internal Revenue Code's excruciating complexity as a scandal crying out for reform.

"Instead of a tax code that crushes innovation [and] imposes burdens on families struggling to make ends meet," Cruz said, "imagine a simple flat tax that lets every American file his or her taxes on a postcard." Flat-tax proponents, including several Republican presidential candidates, have been asking us to imagine a postcard-sized tax return for more than three decades. If it still sounds far-fetched, that is only because we are sadly accustomed to jumping through hoops for the privilege of parting with our money.


"The most serious problem facing U.S. taxpayers is the declining quality of service provided to them by the IRS when they seek to comply with their federal tax filing and payment obligations," says the Taxpayer Advocate Service ("Your Voice at the IRS") in its latest annual report to Congress. "Even when a taxpayer manages to get through to a telephone assistor with a question, the assistor may not be able to provide an answer."


That's because the IRS decided in 2013 "it would answer only what it terms 'basic' questions, declaring 'more complex' questions that it previously answered 'out of scope.'" In other words, the less likely you are to resolve a tax compliance question on your own, the less likely the IRS is to help you.


You can, of course, consult a "tax professional," who makes a living by helping perplexed citizens figure out how much they owe the government. But the very existence of this occupation is an indictment of our byzantine tax system, which is so complicated that even the IRS is reluctant to answer questions about it yet imposes civil and criminal penalties on people who fail to comply with its numerous picayune requirements.


This complexity is not merely, as Cruz observes, inconvenient and inefficient, diverting resources that otherwise would find more productive uses into tax compliance and avoidance activities. It is fundamentally unjust, undermining the rule of law by requiring obedience to inscrutable commands.


Cruz's solution—a single income tax rate with deductions limited to charitable donations and home mortgage interest—would be a step in the right direction. But retaining any deductions at all is an invitation to escalating exceptions, and keeping the income tax would mean keeping the IRS or something like it, contrary to what Cruz implies.

By contrast, a national sales tax, an approach Cruz also has endorsed, would make "abolishing the IRS" feasible and a return to something resembling the current tax code less likely, with the additional economic advantage of taxing consumption rather than savings and investment.

In 2013 Cruz cosponsored the Fair Tax Act, which would have replaced the federal income and payroll taxes with a 23 percent sales tax, collected by a new Treasury Department agency with help from state revenue departments.


Both of these approaches would require exemptions or rebates to avoid large tax increases for people of modest means, which would entail a certain amount of intrusiveness and administrative complexity. But they would still be far superior to the current system, which leaves taxpayers not only on the hook but on the line, vainly waiting for the government's help in filling the government's coffers.


© Copyright 2015 by Creators Syndicate Inc.

http://reason.com/archives/2015/03/2...s#.e6haks:wXNV

And Ted Cruz is a co-sponsor of the 2015 Fair Tax Act as well.

Originally Posted by Judy

Ted, why are you talking about a flat tax on income? Why aren't you proposing the FairTax, HR 25 in the US House of Representatives and S 155 in the US Senate? You're a co-sponsor of this legislation which has already "worked out" all the details of equality and fairness, methods of collection, and the whole ball of wax? A flat tax on income is still a tax on income. It still requires citizens to report their wages, interest, dividends, and so forth and requires businesses to report all of theirs. Many of us want a consumption tax and elimination of the formerly unconstitutional income tax.

Probably because he knows he could never sell the so-called Fair Tax plan to the American public. Our representatives frequently co-sponsor bills they know have little to no chance of passage. The devils in the details and the so-called Fair Tax plan certainly has a lot of devilish details in it!

Furthermore, Cruz knows the media would absolutely hammer him with negatives, for good reason, if he came out publicly in support of the so-called Fair Tax plan. The plan is a can of worms that he knows won't hold up under public scrutiny.

Originally Posted by MW

Probably because he knows he could never sell the so-called Fair Tax plan to the American public. Our representatives frequently co-sponsor bills they know have little to no chance of passage. The devils in the details and the so-called Fair Tax plan certainly has a lot of devilish details in it!

Furthermore, Cruz knows the media would absolutely hammer him with negatives, for good reason, if he came out publicly in support of the so-called Fair Tax plan. The plan is a can of worms that he knows won't hold up under public scrutiny.

LOL! The FairTax legislation is a perfect tax bill that has worked out everything for the people and businesses of the United States. The article I posted based on facts and reason confirms that view.

The income tax is a can of worms that everyone knows steals from one to benefit another, but of course, some people are going to like that idea, I'm just not one of them.

By the way, we picked up another US Senate co-sponsor for the FairTax this month!

Originally Posted by Judy

LOL! The FairTax legislation is a perfect tax bill that has worked out everything for the people and businesses of the United States. The article I posted based on facts and reason confirms that view.

The income tax is a can of worms that everyone knows steals from one to benefit another, but of course, some people are going to like that idea, I'm just not one of them.

By the way, we picked up another US Senate co-sponsor for the FairTax this month!

The so-called fair tax plan has been around for 15 years and it is no closer to passage now than it was when it made its first appearance in the U.S. Congress. Believe it or not, there is a reason for that. If the so-called fair tax plan was all roses and rainbows as you proclaim, it would have passed years ago and we wouldn't be having this conversation. Let's not forget how the so-called fair tax plan came about. It was devised by three greedy billionaires who wanted to cancel taxes on wealth - inheritance, gifts, and capital gains. Those that will suffer the most under the plan will be the middle class and those that gain the most will be the wealthy. Of course let's not forget the distribution of wealth. Yep, the poor will be getting their large prebate checks, along with their food stamps, free cell phones, medicaid, WIC, etc., from dear old Uncle Sam. Oh, and I almost forget, let's not forget our retirees who will end up being retaxed on their retirement savings. The plan, as currently constructed, will never get signed into law. Honestly, I'm amazed that you waste so much time lobbying for it.

Originally Posted by MW

The so-called fair tax plan has been around for 15 years and it is no closer to passage now than it was when it made its first appearance in the U.S. Congress. Believe it or not, there is a reason for that. If the so-called fair tax plan was all roses and rainbows as you proclaim, it would have passed years ago and we wouldn't be having this conversation. Let's not forget how the so-called fair tax plan came about. It was devised by three greedy billionaires who wanted to cancel taxes on wealth - inheritance, gifts, and capital gains. Those that will suffer the most under the plan will be the middle class and those that gain the most will be the wealthy. Of course let's not forget the distribution of wealth. Yep, the poor will be getting their large prebate checks, along with their food stamps, free cell phones, medicaid, WIC, etc., from dear old Uncle Sam. Oh, and I almost forget, let's not forget our retirees who will end up being retaxed on their retirement savings. The plan, as currently constructed, will never get signed into law. Honestly, I'm amazed that you waste so much time lobbying for it.

Oh, MW, you are so confused about the FairTax. Everyone who is a US citizen or legal resident who wants it receives the Rebate check based on household size, not income, to pay the FairTax on essentials up to the Household Consumption Allowance, not just the poor. The middle class and up receive the same Rebate as the poor, all they have to do is sign up for it if they want it, and it's simple, it's based solely on citizenship or a green card, and is calculated on the number of adults and children in the household, adults receive 1 amount and children a smaller amount. Nothing about the FairTax is based on income. Retirees are not taxed on their retirement savings under the FairTax. No one's savings pr investments are taxed under the FairTax. Nobody's income, savings, retirements, earnings, interest, dividends, gifts or inheritances are taxed under the FairTax. There are no "classes" under the FairTax, everyone pays the same on voluntary purchases of new goods and services, expenditures they alone control and only have to pay on above the Household Consumption Allowance, if they sign up for the Rebate.

These are the taxes that are eliminated by the FairTax: corporate income, personal income, payroll tax, interest, dividend, estate and gift taxes for everyone.

NumbersUSA was founded in 1997 to stop illegal immigration and reduce legal immigration levels, 2 years before the the first FairTax bill was introduced into Congress. Does the fact that we have more immigration now than we did then justify someone making a comment about NumbersUSA like you've just made against Americans for Fair Taxation and their FairTax bill? It took Americans 76 years to end slavery in the US from the time our Constitution was written, and it took US another 101 years to establish equal rights for black Americans, heck if took 20 years to enforce the US Supreme Court Ruling of Brown versus the Board of Education,and you think because a bill introduced in 1999 that still hasn't passed won't ever pass because it hasn't passed? Are you serious?! The same political scum who have have flooded our country with illegal aliens and excess immigrants, burdened our economy with the impact of free trade treason, run up our national debt to over $18 trillion, put over 20 million Americans out of work and over 70 million Americans so poor they qualify for Medicaid while handing out tax credit welfare checks to illegal aliens, are the same scum who support the income tax, and as we all know, they are a very powerful force to be reckoned with, especially when people you would expect to know better align with them on the income tax, whether they are doing so intentionally or not.

As soon as the FairTax was introduced, the Anti-FairTax Lobby, comprised of lawyers, accountants, and tax industry organizations all united to fight it and the way they did it is the same way they support and promote illegal immigration and excess immigration, they use their "friendly" 501 C 3 to do a study, get their industry "economists" to write an opinion letter, post dribble and lies on the internet, which is where you got your misinformation about the FairTax, causing you to believe that a Rebate available to all citizens and legal residents who want to sign up for it only benefits the poor, and a national sales tax that only taxes new goods and services is somehow "re-taxing" retirement savings when neither is true, and of course, sending their millions to political scum to buy them up to ensure they either oppose it or let it rot in the Ways and Means Committee.

We have over $14 Trillion of US capital stored offshore to avoid the income tax. We have thousands and thousands of industries and businesses who moved their operations to other countries to avoid the income tax which has caused in trade deficits of around $800 billion a year because of the income tax. We have over $1.3 trillion a year of our economy siphoned off into 501 C 3 tax fraud "charities" to avoid the income tax. We have over $18 trillion in national debt because of the income tax. Social Security and Medicare are under threat of dissolution, being converted into a private fund or extending the age of retirees and/or reducing benefits because of the income tax.

The enormous problems the income tax has caused our nation over the past 102 years are self-evident and it must go, the damage must end. The income tax was never a proper tax to raise revenue for the United States, which is why it was unconstitutional under our original Constitution, and had to be amended to allow it. It was always the wrong way to raise revenue in a free nation of free citizens, and unfortunately has proven itself just that at the enormous expense of the American People. It was always wrong because it's not a concept of liberty or freedom or an appropriate means of government revenue raising in a free society, it's an authoritarian concept of socialism/communism, which is exactly what it's delivered, which is why Republicans vehemently opposed it to begin with and Real Republicans have opposed it to this day.

And about that "distribution of wealth" you mentioned, mandated taxation is not how to properly distribute wealth. Wealth needs to be earned, invested and protected. Giving foreign imports tax free access to our markets doesn't do that, running our capital investors and manufacturers out of the country doesn't do that, flooding our nation with immigrants and telling them to file income tax returns so they can get refunds for tax they didn't pay to begin with doesn't do that. Taxing personal income, earnings, gains, and estates of American Citizens and American Workers doesn't do that. Taxing the payrolls, gains, net incomes and profits of American Businesses doesn't do that. Taxing interest, dividends and gifts of Americans doesn't do that. The income tax ruins the wealth of everyone it taxes and runs everyone who can afford to out of the country, which are our industries and capital investors who are the foundation of the US economy. But when their operations and investments aren't here, they become an enemy of our own country pushing policies that help them in foreign locations at our expense, the complete opposite of what an appropriate tax policy should be.

Democrats did this to our nation. It took them from 1913 to the present to use the income tax to destroy the US economy and convert the United States to a bankrupt, impoverished, unsustainable, government-dependent nation. They succeeded while too many Republicans stood idly by without an alternative, then listening to the dribble of the Anti-FairTax Lobby when there was an alternative like the FairTax, and convinced them to oppose the best tax reform option ever presented to the American People, which also happens to be one of the best written pieces of legislation ever introduced into the US Congress.

The organization that developed the FairTax legislation is Americans for Fair Taxation. It was started by 3 men from Houston, Leo Linbeck, Jack Trotter and Bob McNair in 1994. They each invested $1.5 million to start the organization and fund research to find out what type of new tax system would best serve the needs of the American People and raised another $17 million to complete the activity. They paid 10 economists to conduct interviews of citizens and businesses all over the country and from those focus groups conducted over 3 years, was a national sales tax on new goods and services consumption as the favored plan. All the details were resolved and the legislation written, ready for introduction into the US House of Representatives in 1999 where of course it has languished with most other pieces of legislation that would actually benefit the American People.

Like I've posted before, not everyone is going to either understand, comprehend or appreciate the FairTax and its many benefits. In our country, it's not necessary that everyone agree with everything we do. So, I've no hard feelings towards anyone who doesn't like the FairTax and prefers to stay with the income tax. I just won't support them or vote for them, because in my opinion, they will not be in the ready to solve our problems, whereas someone who does support the FairTax, will be.

Judy wrote:

Oh, MW, you are so confused about the FairTax. Everyone who is a US citizen or legal resident who wants it receives the Rebate check based on household size, not income, to pay the FairTax on essentials up to the Household Consumption Allowance, not just the poor. The middle class and up receive the same Rebate as the poor, all they have to do is sign up for it if they want it, and it's simple, it's based solely on citizenship or a green card, and is calculated on the number of adults and children in the household, adults receive 1 amount and children a smaller amount.

The prebate – or “annual consumption allowance” – is designed in part to relieve poverty-level Americans by providing a monthly check that would essentially offset all of their sales tax expenditures. The amount of the allowance would be based on poverty-level guidelines and would increase for larger families. With that said, what class of folks typically have larger families? Bingo, it's the poor. Actually, many of our country's poor have figured out that having more babies than they can support is a way to milk Uncle Sam. If this doesn't classify as a distribution of wealth, I don't know what does!

Judy wrote:

Retirees are not taxed on their retirement savings under the FairTax.

Another obfuscation of the truth. Of course current retirees will have their retirement savings taxed. Supporters of the fair tax like to tout the fact that you will be able to withdraw funds from your IRA tax free. While that is true, what are the ramifications on the dollars currently in after-tax savings or Roth IRA’s? These savings have been built up over these people’s lifetimes, and have been saved after paying income taxes when earned. Institution of a sales tax will in effect cause all of these dollars to be double taxed, since they will now be taxed again when spent.

Judy wrote:

The organization that developed the FairTax legislation is Americans for Fair Taxation. It was started by 3 men from Houston, Leo Linbeck, Jack Trotter and Bob McNair in 1994. They each invested $1.5 million to start the organization and fund research to find out what type of new tax system would best serve the needs of the American People and raised another $17 million to complete the activity.

Like I said, it was all about three billionaires trying to figure out a way to protect their wealth.

I would like to correct some of your other very obvious obfuscations but don't have the free time you seem to have on the keybord.

Originally Posted by MW

Judy wrote:



The prebate – or “annual consumption allowance” – is designed in part to relieve poverty-level Americans by providing a monthly check that would essentially offset all of their sales tax expenditures. The amount of the allowance would be based on poverty-level guidelines and would increase for larger families. With that said, what class of folks typically have larger families? Bingo, it's the poor. Actually, many of our country's poor have figured out that having more babies than they can support is a way to milk Uncle Sam. If this doesn't classify as a distribution of wealth, I don't know what does!

Judy wrote:



Another obfuscation of the truth. Of course current retirees will have their retirement savings taxed. Supporters of the fair tax like to tout the fact that you will be able to withdraw funds from your IRA tax free. While that is true, what are the ramifications on the dollars currently in after-tax savings or Roth IRA’s? These savings have been built up over these people’s lifetimes, and have been saved after paying income taxes when earned. Institution of a sales tax will in effect cause all of these dollars to be double taxed, since they will now be taxed again when spent.

Judy wrote:



Like I said, it was all about three billionaires trying to figure out a way to protect their wealth.

I would like to correct some of your other very obvious obfuscations but don't have the free time you seem to have on the keybord.

MW, the Rebate is available to everyone who is a US citizen or legal resident, regardless of income or poverty status. It is used to offset the FairTax up to the Household Consumption Allowance for everyone who signs up for it. It is not "distribution of wealth", because the amount is based upon actuaries of what people spend to survive, just like the personal deduction and dependent deductions on an income tax return. Do you consider the personal deduction and dependent deductions on your income tax return "distribution of wealth"? I didn't think so. You don't understand the FairTax.

Most people's retirement funds are filled with employer contributions or tax-deferred funds they put in themselves, which means the funds have not been taxed, and are taxed when they draw them out under the income tax. Under the FairTax, there will be no income tax, so these retirees will experience a great advantage because no income tax will ever be charged them. Yes, when they pull their money out of savings account that were not tax deferred retirement funds and spend it on living expenses or whatever they choose, they will pay FairTax on that portion that goes towards new products and services, but most will have signed up for the Rebate, and that exempts the FairTax from that portion of spending and yes they will pay FairTax on such spending above that level, the same as they would have paid income taxes that are embedded in the prices of goods and services now, but which will not be present in prices under the FairTax because there are no income taxes embedded in prices under the FairTax. See, you don't understand the FairTax, MW.

The men who started the organization that developed the FairTax were looking for a new tax system that would improve our country and the lives of our citizens. And that's exactly what they did. It's a shame you don't understand the FairTax well enough to see that. In fact, as these discussions move along, it appears you like most people, don't understand the income tax very well, either.

Originally Posted by Judy

MW, the Rebate is available to everyone who is a US citizen or legal resident, regardless of income or poverty status. It is used to offset the FairTax up to the Household Consumption Allowance for everyone who signs up for it. It is not "distribution of wealth", because the amount is based upon actuaries of what people spend to survive, just like the personal deduction and dependent deductions on an income tax return. Do you consider the personal deduction and dependent deductions on your income tax return "distribution of wealth"? I didn't think so. You don't understand the FairTax.

Most people's retirement funds are filled with employer contributions or tax-deferred funds they put in themselves, which means the funds have not been taxed, and are taxed when they draw them out under the income tax. Under the FairTax, there will be no income tax, so these retirees will experience a great advantage because no income tax will ever be charged them. Yes, when they pull their money out of savings account that were not tax deferred retirement funds and spend it on living expenses or whatever they choose, they will pay FairTax on that portion that goes towards new products and services, but most will have signed up for the Rebate, and that exempts the FairTax from that portion of spending and yes they will pay FairTax on such spending above that level, the same as they would have paid income taxes that are embedded in the prices of goods and services now, but which will not be present in prices under the FairTax because there are no income taxes embedded in prices under the FairTax. See, you don't understand the FairTax, MW.

The men who started the organization that developed the FairTax were looking for a new tax system that would improve our country and the lives of our citizens. And that's exactly what they did. It's a shame you don't understand the FairTax well enough to see that. In fact, as these discussions move along, it appears you like most people, don't understand the income tax very well, either.

I understand the so-called fair tax plan well enough to tell when someone is dancing around and playing loosely with the actual facts, which you seem to do on a regular basis when confronted with a factual rebuttal. For example, your last dancing attempt didn't really answer my comments. It was just a bunch of gobblygook designed to cloud the issue .......... basically the same old talking points.