Presidential candidate Ted Cruz’s tax proposals, which include cutting taxes for most individuals and replacing the corporate income tax with a flat 16 percent business tax, would reduce federal revenue by $8.6 trillion over a decade and “almost surely depress the economy over the long run,” according to a policy study and its authors.
Cruz’s plan would benefit wealthy taxpayers “dramatically” and raise taxes slightly for some people in the bottom fifth of low-income taxpayers, according to the report by the Tax Policy Center.
Cruz proposes to refashion the U.S. regime as a consumption-tax system, spurring the growth that many economists say comes from eliminating tax-driven barriers to saving, working and investing.
But if interest rates rose and Congress failed to enact either “extraordinarily large cuts in government spending or future tax increases,” the plan would create “persistently large, and likely unsustainable, budget deficits,” the report said.