Ted Cruz has repeated over and over that the biggest difference between himself and the other candidates is that he is the only one with a comprehensive tax plan that is actually articulated on paper. This articulation consists of a forearm, wrist, hand, and a collection of fingers that, once punch-sunk into the corporate orifice, can be spread out to tickle the nearby organs. As unbelievably shitty and patronizing as his little postcard theory is, it is merely the bait fish and chum that he’s using to land the Moby Dick of a corporate tax abortion.
I spent some time on his website looking for the postcard for corporations, and strangely he doesn’t seem to have one. Oops. Looks like his vision for the IRS just got a little larger, but never mind all that shit. The real blood and guts are a flat business tax of 16% and the elimination of the Minimum Alternative Tax for corporations. In return for this, he claims that GDP will exceed current expectations by almost 14%, wages will increase over 12%, and almost 5 million new jobs will be created. In theory, all of this will incentivize American companies to keep their businesses on the continent rather than shipping them overseas. Finally, Cruz has laid all of this on a foundation of pro-business energy and environmental regulations that will ensure success.
Sounds fabulous. So do unicorns. The only difference is that unicorns fart rainbows and his tax plan oozes bullshit.
Let’s start at the beginning: the 16% flat tax. Currently, the American corporate tax rates work in the following way. Unlike personal income tax brackets, corporations only pay taxes on the income that exceeds the previous tax bracket. For instance, the first bracket is from $0–$50,000. The next bracket exempts the first $50,000, but you pay a higher rate up to $75,000 and so on up the scale. Here’s what we have now:
$0–$50,000 = 15%
$50,000–$75,000 = 25%
$75,000–$100,000 = 34%
$100,000–$335,000 = 39%
$335,00–$10,000,000 = 34%
$10,000,000–$15,000,000 = 35%
$15,000,000–$18,333,333 = 38%
$18,333,333 - infinity = 35%
The percentages look a little strange at first, but suffice to say it's a decent balance of percentages for actual taxed income. For instance, the top bracket pays a lower percentage than the previous one, but if you’re Walmart and you make billions the government is definitely getting more than the extra 3% from the $18,333,333 bracket.
Of course, Cruz has repeatedly suggested that this will take the pressure off of small business owners, but in fact, of all the brackets on that chart, the only one that gets a tax hike is the bottom bracket. That's the bracket encompassing all the little people who are trying to make some extra cash on the side. I’ve almost got to admire the man for his consistency with regards to the poor both personally and professionally. As far as the money that would instantaneously vanish from tax revenues, it doesn’t take more than a glance to realize that the amount would be staggering. For starters, the Walmarts of the world would be paying less than half of what they currently pay.
This is where the elimination of the Alternative Minimum Tax becomes key. The AMT was created in response to massive companies that were doing such a good job of hiding their cash that they were paying virtually—and in some cases literally—nothing. It’s a bit like hiding money in overseas banks, except the system at the time allowed it to occur on a grand scale. Finally everyone got sick of it and the AMT was established. In short, no matter what tax bracket they were able to negotiate themselves into, any company that made some ridiculous amount of gross profit would pay the AMT (something like 26%-28%) instead of the bracketed rate.
I think it’s fairly obvious why Senator Cruz would like this to go away, and it leads directly into the next issue. The GDP will certainly increase and the average pay rate will probably increase at least 10%. However, realistically, what part of corporate America is going to get most of that raise? Ted is a big fan of math, so let's do it:
1,000 workers make $10 a year. One executive makes $10,000,000. Therefore, the "average worker" makes $10,000 a year. If we give the boss a $1,000,000 raise, the average worker now makes ~$10999 a year. Yay! The average worker got a 10% raise!
One could point to competition as an incentive to pay workers more and all that shit, but look at the state of the airlines and realize that they all miraculously seemed to arrive at the same particular price range and business model independently of each other. Is this legal? No if you talk about it, yes if you talk about it but nobody knows...
The idea of a competitive market to lower prices and raise wages works only so far as the real profiteers settle on what their minimum salary and corporate profits will be; the competitive marketplace pressures start at the top and...trickle down. Not vice-versa. So when Ted Cruz says his plan will create 4,861,000 new jobs—a remarkably fine-tuned estimate—the question the worker must ask him or herself is, “how much will most of those jobs pay?” Cruz states in his plan that he wants to eliminate government regulation to “get the government out of the way so people can do what they do best—innovate, expand, and create new jobs.” Nothing about deregulation has ever, ever had positive consequences for the blue collar and middle classes, and one need look no farther than the mortgage crisis and subsequent recession that Obama’s policies have finally pulled the country, if not the world, out of.
The final piece of his lovely puzzle is something we’ve heard over and over in debates: the infamous Washington Cartel. I would love to spend an afternoon in the park downtown asking people what that means, but I really don’t think I need waste my time because I already know they don't. Besides, I can just quote him directly from the website none of them ever read:
It is "the army of lobbyists allied with politicians—the Washington Cartel—than now sneaks benefits into the tax laws for friends and punishments for foes. Instead of government choosing winners and losers, individuals and businesses will be free to prosper on their own merit.”
How will he go about breaking up the Washington Cartel’s preferential treatment of certain markets? For starters, he wants what he calls an energy renaissance. Elements of this include ending EPA regulations that hurt the poor businesses the law currently stifles by disallowing them to dump chemicals into the water and belch pollution into the air like Beijing. Apparently this all burdens “small businesses and farmers”, but I’m sure a nice tax hike for their bracket will more than offset any benefits. He would also like to adopt an energy plan that “embraces the bountiful resources in this land—from oil to natural gas to ethanol.” It seems to me that clean energy is conspicuously missing from that list, but never mind. Those industries have been unfairly benefitting from the lobbying and politicking of the Washington Cartel...in favor of clean energy and environmental regulations.
I’m terribly sorry, but I have to ask if anyone seriously believes that the dominating lobbying force in this country is environmentalists. What Cruz is proposing is, in fact, not unrestricted competition, but a simple swing of the pendulum in favor of filthy, antiquated power like oil and coal. Ideally, things like the Gulf oil spill by BP would be a considered pro-environmental serendipity that would allow superiorly lubricated dolphins to swim into dragnets faster. The most infuriating part of it all is that he absolutely knows it. Again, resting one’s political and intellectual hopes on the average American not reading even a basic outline on your website seems to be an incredibly safe bet.
Now and finally—all that being said, let’s say we decide to swallow the red pill and have to deal with a government with no money. What will Ted Cruz do to reduce government expenditures accordingly? He has, in fact, listed a quite a few things he would immediately eliminate that would make up the cash. I’m just going to list them, and you can glean the pattern for yourself.
FIVE FOR FREEDOM
Abolish the IRS, the Department of Education, the Department of Energy, the Department of Commerce, and the Department of Housing and Urban Development. A Cruz Administration will appoint heads of each of those agencies whose sole charge will be to wind them down and determine whether any programs need to be preserved.
Internal Revenue Services—fuck over poor people and give the rich and corporations as much money as humanly possible.
Department of Education—make Santa Barbara and Fuck, Where? Mississippi fiscally responsible for funding their own education. Also, make all grants block grants, meaning that they can be spent any way a state chooses rather than specifying it be used to replace Fuck, Where?’s student bio waste trenches with functioning commodes and toilet paper.
Department of Energy—fuck the sun.
Department of Commerce—fuck the minimum wage, and get pregnant bitches on the assembly line stat.
Department of Housing and Urban Development—fuck poor people again, and fuck anyone who isn’t white. Actually, this is my favorite one. To quote, this will “empower Americans by promoting the dignity of work and reforming programs such as Section 8 Housing.” That is fucking awesome that he actually put that in print. He might as well have said “socially shame the disabled and poor for not taking seven of his 4,861,000 new unregulated jobs making $3/hr, and take away their housing to drive the point home.”
And just like the baseball-sized jawbreaker of a ball gag we're going to be choking on, there are many, many layers of bullshit. Let’s say Ted Cruz is given a magic eraser and he simply wipe every single one of those departments, the grand total savings would be about $102 billion dollars. In context, that’s over $60 billion dollars less that we spend on veterans’ benefits, and a whopping 2.4% of the federal budget. Remember, that’s assuming they simply vanish in totality over night, including turning the IRS into a gigantic landfill for all those postcards without even paying someone to set them on fire. Well, we live in a country that gives you the right to believe that those cuts will sufficiently offset the losses from his individual and corporate tax plans. The tastiest part is that this is being presented by a man who wants to alter our foundational civic document and add a Balanced Budged Amendment.
That’s part I. Part II, well, I’m just going to list it verbatim and you tell me what the plan is.
TWENTY-FIVE FEDERAL “ABCs”
Empower the people by reducing the alphabet soup of Agencies, Bureaus, Commissions, and other programs that prop up special interests, at the taxpayer’s expense. A Cruz Administration will identify all unnecessary programs—these 25 are merely a start. [Oh boy, here we go...]
1. Appalachian Regional Commission
2. Climate Ready Water Utilities Initiative
3. Climate Research Funding for the Office of Research and Development
4. Climate Resilience Evaluation Awareness Tool
5. Consumer Financial Protection Bureau
6. Corporation for Public Broadcasting
7. Corporation for Travel Promotion
8. Global Methane Initiative
9. Green Infrastructure Program
10. Greenhouse Gas Reporting Program
11. Legal Services Corporation
12. National Endowment for the Arts (this is a social principle actually enshrined in the Constitution, which is odd for a Constitutional textualist like Cruz. Except he’s an asshole.)
13. National Endowment for the Humanities (I know what this is, but I like to think Cruz's cutting of this is more of a philosophical statement about redacting the Enlightenment and burning all associated books.)
14. New Starts Transit Program
15. Pacific Coastal Salmon Recovery Fund
16. Presidential Election Campaign Fund
17. Regulation of CO2 Emissions from Power Plants and all Sources
18. Regulation of Greenhouse Gas Emissions from Vehicles
19. Renewable Fuel Standard Federal Mandates
20. Saint Lawrence Seaway Development Corporation
21. Sugar Subsidies
22. Transportation investment Generation Economic Recovery
23. UN Intergovernmental Panel on Climate Change
24. UN Population Fund
25. Catfish Initiative
Fucking. Wow. If you want to look them up be my guest, but I have and can tell you that those names speak for themselves.
This is the proposal of a social sadist and an global sociopath, and so absurd that Ted Cruz is either hissing lies through his teeth, or actually crazy enough to believe this is what the world should be. Either is a pretty good bet for money, and a terrible one for visionary leadership. If passed, this fiscal renovation will allow everything almost everyone on the planet hates about what the rich and corporations can do to everyone else, the planet, and freedom when they operate in a complete regulatory vacuum. It will literally ruin the globe and everything good on it.
This is the state of politics today. People don’t read, they don’t consider outcomes, and all of this stems from the vitriolic frothing of die-hard partisan loyalty. This cannot continue, and the fact that someone can get on the national stage and credibly forward something like this demonstrates that, if people aren’t paying attention, the world really can fall apart.
Also, fuck Ted Cruz.