Ted Cruz presidential campaign, 2016/Taxes

	; ; Former presidential candidate; Ted Cruz
	Political offices: ; U.S. Senator; (Assumed office: 2013);
	Cruz on the issues:
	Taxes • Banking policy • Government regulations • International trade • Budgets • Agricultural subsidies • Federal assistance programs • Foreign affairs • Federalism • Natural resources • Healthcare • Immigration • Education • Abortion • Gay rights
	Republican candidate:
	Donald Trump
	Ballotpedia's presidential election coverage; 2028 • 2024 • 2020 • 2016

Ted Cruz suspended his presidential campaign on May 3, 2016.^[1]

This page was current as of the 2016 election.

Cruz wrote an op-ed in USA Today on April 25, 2016, calling for tax reform. “Sunday was Tax Freedom Day, marking the first point in the year in which Americans have earned enough to pay their 2015 tax bill. Four straight months — that’s how long it takes for the hardworking people of this country to fund the bloated government. It shouldn’t take us a third of the year simply to pay the government, much less spend billions of hours and dollars of our time to do so. … Instead, I have proposed the Simple Flat Tax, which scraps the existing tax code and replaces it with a much simpler, fairer and more pro-growth system. It collapses the existing seven individual rates into one flat rate of 10% for everyone, abolishes the IRS as we know it, and dismantles the Washington Cartel by cutting off their access to the tax code as a political weapon. All Americans will be able to fill out their taxes on a postcard or phone app — in a matter of minutes,” Cruz outlined.^[2]

While discussing the details of his flat tax plan in a radio interview on April 15, 2016, Ted Cruz accused the Internal Revenue Service (IRS) of corruption. “The IRS is absolutely corrupt. It is facilitating illegal immigration. The commissioner has been a party to lawlessness. Indeed the IRS has persecuted American citizens who were perceived to be political opponents of the President. It has gone after conservative groups, it’s gone after tea party groups, it’s gone after pro-life groups, it’s gone after pro-Israel groups, it’s gone after groups that simply defend the Constitution, that’s deemed inconsistent with the political priorities of the Obama administration and that is an abuse of power,” he said.^[3]

At the eleventh Republican debate on March 3, 2016, Cruz explained how the federal government could collect taxes if he abolished the IRS, saying, “So my simple flat tax I have rolled out in precise detail how it will operate where every American can fill out our taxes on a postcard. And if you want to actually see the postcard, see all the details, you can find them on our Web site. It's tedcruz.org. When he we get rid of all the corporate welfare, all the subsidies, all the carve-outs in the IRS code, it dramatically simplifies it. And under Obama, the IRS has become so corrupt and so politicized we need to abolish it all together. Now, at the end of that there will still be an office in the Treasury Department to receive the postcards but it will be dramatically simpler.”^[4]

On October 28, 2015, Ted Cruz unveiled his tax plan. He proposed a 10 percent flat tax on all individual income from wages. He also proposed elimination of the payroll tax and the corporate income tax, to be replaced by a 16 percent Business flat tax. Cruz said that social security and medicare will remain fully funded, despite elimination of the payroll tax, which funds those programs. Cruz's plan also included a Universal Savings Account, which would allow every American to save up to $25,000 annually on a tax-deferred basis for any purpose. Cruz also promised no estate tax, alternative minimum tax or ObamaCare taxes, and would do away with taxes on profits earned abroad.^[5] An analysis by the Tax Foundation, a group that supports lower tax rates, said the senator's reforms would "represent a significant shift from the current tax code." The group estimated Cruz’s proposals would increase the deficit by as much as $3.6 trillion over the next 10 years, but that figure drops to a $768 billion deficit when including possible economic growth.^[6] The libertarian Cato Institute said Cruz's corporate business activity tax is essentially a value-added tax. The proposal is similar to a sales tax, since it's assumed that businesses will pass the cost of paying it onto consumers. "He says he wants a 'business flat tax,' but what he’s really proposing is a value-added tax," Cato said.^[7] ^[8]

Cruz has been very critical of the IRS and the extra scrutiny it gave conservative groups seeking tax-exempt status. He has frequently called for abolishing the agency. At a Senate Judiciary Subcommittee hearing on July 29, 2015, investigating the Internal Revenue Service scandal, Cruz said that “If the IRS has become a partisan arm of the Democratic National Committee, there can be no stronger argument for ending the IRS as we know it, so that no Administration, Democrat or Republican, can use the IRS to target its political opponents.”^[9]

In an April 27, 2015, Washington Examiner interview, Cruz has advocated a flat tax where everyone pays the same rate, as well as relegating tax collection and enforcement to a smaller part of the Treasury Department. Cruz believes that a switching to flat tax would make the IRS irrelevant. ^[10]

In 2014, Cruz co-sponsored S 1431 - Internet Tax Freedom Forever Act, which proposed making the ban on state and local taxation of Internet access and e-commerce permanent.^[11]

Cruz co-sponsored S 1183 - Death Tax Repeal Act of 2013, which proposed amending "the Internal Revenue Code to: (1) repeal the estate and generation-skipping transfer taxes, and (2) make permanent the maximum 35% gift tax rate and a $5 million lifetime gift tax exemption. Provides for an inflation adjustment to such exemption amount."^[12]

According to The Dallas Morning News, during his 2012 Senate campaign, "Cruz proposed moving toward a flat tax system under which everyone pays the same rate. He said that there would still be a large standard deduction for lower-income earners and that he would keep deductions for mortgage interest and charitable donations."^[13]

During his 2012 Senate campaign, Cruz supported keeping all of the Bush tax cuts.^[13]

Cruz proposed cutting corporate tax rates during his 2012 Senate campaign. He wrote, "We should cut corporate tax rates — to 15% immediately — to spur new investment and create new jobs in America."^[14]

Cruz signed the Americans for Tax Reform's Taxpayer Protection Pledge in 2011.^[15]

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