Ted Cruz

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. According to one study, tax compliance took Americans 6.1 billion hours; another study estimates tax compliance carries hidden economic costs of between $215 billion and $987 billion annually.

Nearly half of small businesses spend $5,000 or more annually on the administration and accountant fees of federal taxes alone and 27% report spending more than $10,000. That’s money they spend before they pay their actual taxes.

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.

The average family will pay no taxes whatsoever on the first $36,000 of income. Individuals will be able to save up to $25,000 per year tax-deferred for any purpose — whether it’s saving for college, investing in a small business, or just building your nest egg.

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According to the non-partisan Tax Foundation, within a decade the Simple Flat Tax would increase take-home pay by $7,600 for the median household, create 4.9 million jobs, and increase after-tax income by double-digits for all income groups.

But tax reform is only one element of our growth platform. In a Cruz administration, we will also audit the Federal Reserve and stabilize the dollar so that we don’t set ourselves up for another crash as we saw during the 2008 housing crisis.

Additionally, I have laid out a detailed plan for cutting government waste in the Five for Freedom plan, which gets rid of departments and unnecessary agencies like the Consumer Financial Protection Bureau and returns dollars and decisions back to the states and the people.

We will rein in the federal regulators who are stifling growth — starting with repealing Obamacare and replacing it with care that’s more personal and accessible. We will halt President Obama’s federal agencies from adopting liberal agendas such as the “Clean Power Plan,” which raises energy prices for all, prevents companies from hiring more workers and gives more power to the government. We’re going to wipe away these costly programs and empower the people to once again thrive and prosper.

Together, we will reduce the burdens on every individual, every small business, and every industry so that they will be free to expand and create new jobs. When it comes to energy, we will expand exploration, and pipeline infrastructure – which will create millions of new jobs. When it comes to manufacturing, the Simple Flat Tax is border adjustable, which levels the playing field and makes exports tax-free. That will bring millions of manufacturing jobs back to America. It also allows for immediate expensing of equipment, which is a powerful catalyst for job creation. When it comes to farming, we will get rid of the EPA’s overreach and stop picking winners and losers.

The Cruz Business Flat Tax gets rid of the existing corporate income tax with its massive tangle of loopholes and carve-outs. It does not replace it with a so-called European-style Value Added Tax (VAT), as some suggest. The Cruz tax is not a sales tax imposed on consumers. And unlike European VATs, the Cruz Plan is not imposing an additional tax on top of existing taxes, in fact it eliminates several other existing taxes altogether: the payroll tax, the death tax, the Obamacare tax and more. The respected Tax Foundation calculates that there would be some modest revenue loss at first, but for every dollar of revenue lost to the government, there would $23 created in the economy — a fantastic return. Compare that to what the Tax Foundation calculated for the Trump tax plan: over $10 trillion of lost revenue and a meager $1.45 return to the economy for every dollar of its massive loss to the Treasury.

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Our plan for growth, starting with tax, monetary, and government reform, will get the government out of Americans’ lives and spur tremendous opportunities for Americans from every walk of life to innovate, open new enterprises, and achieve their aspirations.

This pro-growth platform is not a fanciful new idea. We know it works. When President Reagan took office in 1981, his agenda of lower taxes faced strong opposition from the Democratic speaker of the House. But Reagan took the case to the people and they rose up to reform our economy because they knew after Jimmy Carter’s term that the answer to growth was not the government — it was just the opposite. And they were right.

During the 1980s, as the late Wall Street Journal editorial-page editor Robert Bartley wrote in his 1992 book The Seven Fat Years, the overall economy grew by 30%, household disposable income increased by 20%, and 18 million new jobs were created.

That’s the kind of revolutionary growth we can ignite once again if we enact fundamental reforms to reduce Washington’s power and return opportunity to the American people — the greatest force for innovation the world has ever known.

Sen. Ted Cruz is a candidate for the Republican presidential nomination.

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