Part 1: The Most Patronizing Suggestion
The ever-renewing wellspring of credibility for Ted Cruz’s conservative values is his famous flat tax postcard published on his website. Actually, it’s not that famous in the sense that I’d bet my house most people haven’t actually looked at it, much less thought about it. Frankly, without the words “Cruz Flat Tax Form 2017” plastered across the top, it would likely be mistaken for a customs form for a country like Cuba that’s just happy you showed up.
In case you haven’t seen it, here’s the entirety of what a family would submit for their 2017 taxes if he would manage to win the presidency and then pass a complete overhaul of the tax code in his first year—no small task:
I didn’t get the rights for this, but I’m sure he doesn’t care considering his plan is to give away about 70 million of them for free if he can pass his tax package. In addition to this form, he asserts the following on his website:
1. The personal income tax flat tax rate is 10%
2. The plan includes a $10,000 standard deduction and a $4000 personal exemption.
3. It keeps the Child Tax Credit, expands and modernizes the Earned Income Tax Credit with greater anti-fraud and pro-marriage reforms.
4. The plan keeps the charitable giving deduction and features a home mortgage interest deduction, capped at principal value of $500,000.
5. All families can create a Universal Savings Account (USA...how charming) in which you can put $25,000 tax-deferred dollars that can be used any time for any reason.
The final component of the personal income tax system is that Cruz will “abolish the IRS”. Actually, it now reads “abolish the IRS as we know it”, because Marco Rubio abused him rather handily in an early debate by noting that, at the very least, someone’s going to have to stand in a room marked IRS to read the postcards. Fair enough though—candidates are supposed to edit their comments and say it’s what they always said.
The problems with this proposal are so numerous and elementary that I almost feel embarrassed pointing them out. In fact, the most difficult task is to decide which one deserves the honor of being presented as the archetypical thorn amongst dead rose stems. However, it is in my good nature to press forward in the face of adversity.
The flat tax in practice
The principle of a flat tax is that the fairest tax system is one in which every American pays an equal percentage of their income in tax, with a bare minimum of deductions or loopholes for purely realistic application. As an example, the Cruz plan offers the $10,000 standard deduction and $4000 personal exemption as an attempt to free up those on the lowest end of the economic scale from a flat tax of 10% cutting a living wage down below the poverty line.
On his website, Cruz explicitly states that a family of four would pay no taxes on their first $36,000 dollars of income. This is initially difficult to understand, as the standard deduction on the tax form is $10,000 plus the $4000 personal exemption. The Child Tax Credit remains in effect as well, currently $1,000 per child.
Today’s system compared.
A standard deduction total for a married couple filing either jointly or separately totals $12,600. For a family of four (two adults, two non-tax-filing children), that would amount to a base of $14,600 ($2,000 for two kids). Also, the 2015 personal exemption is $4000, and may be claimed twice—once for you and once for your spouse for a total of $8000. Therefore, the total amount of cash initially exempted for a family of four is $22,600 right off the top.
Ted Cruz says a family of four has a $36,000 tax break from his system. However, if you look at the Cruz tax card, you will note an oddity. Line 2 says that you multiply the number of “persons” in the house by $4000, however, Cruz says he will keep the Child Tax Credit as well. What the hell does “persons” mean then?
Today’s system allows for a highly unique circumstance whereby you may claim a $4000 deduction for two adults and two dependents, but these dependents are not “children” in the traditional sense. You may claim them as dependents if your son and daughter are each required to pay income taxes but rely on you to take care of them because they are too lazy to get a job. In that case, they are “persons”, and you are entitled to claim an additional $4000 each because they are full tax-paying citizens whom you are taking care of. In other words, not “children”. That brings your total about up to the following under the Cruz plan:
$10,000 standard deduction plus $16000 for your the adults. This amounts to $26,000 dollars. Where this additional $10,000 comes from to result in a tax break of $36,000 dollars is not just murky, it’s entirely omitted from any information on his website of which Cruz is so proud. I would go so far as to say it’s a completely arbitrary declaration that makes no sense. Add onto the pile the fact that no reasonable person is going to read “family of four” as “me, my spouse, and my two incredibly lazy kids”, resulting in bullshit layered on top of bullshit. Frankly, he’s hoping—probably correctly—that only someone like me would actually read everything on the site with a calculator handy. The real deduction for a family of four with two adults and two real kids is $20,000 ($10,000+$8,000+$2,000), which fully merits this exchange between Cruz and Megyn Kelly that is plastered all over his site:
Megyn Kelly: The critics of this plan say, “Well, it won’t work because if you do a flat tax you need at least a 20% tax across the board. Otherwise you’re not going to take in enough money to support the United States.”
Ted Cruz: Well listen, any critic who’s saying that is simply not looking at the numbers. If you go to our website, tedcruz.org, tedcruz.org [sic], you can see the exact numbers on the tax plan.”
Well...I just did them. I’ll leave it up to you to decide, and the only thing I can think of is that each spouse in a highly unique family of four can claim the $10,000 standard deduction, thereby making the number $36,000 instead of $26,000. This just isn’t believable. There’s nothing on the website indicating that “standard deduction” is a radical departure from what it means now, and if it did, you’d think that would be a gigantic opportunity to further sell the plan. In reality, the traditional family of four—and by that I mean the textualist and objectivist plain reading interpretation of the Constitution Cruz is adamantly in favor of for the Supreme Court, implying two adults and two children—is $20,000 under his new plan.
Right. It’s $2,600 less than now.
Now who do you suppose Ted Cruz is suggesting his generous deduction plan is designed to help? Ted’s website says: “This plan exempts a large amount of initial income for low-and middle-class income taxpayers.” Magnanimous indeed, but translation: it fucks the poor. At the very least, his 10% flat tax plan will allow him to suck an additional $260 bucks out of every taxpaying citizen regardless of socioeconomic status, thereby disproportionately hurting the exact people he suggests he’s being a good shepherd for.
This is known as being a “lying asshole”, but we will be altering both those words by the time we’re done picking this all apart. It does raise a very important question though. On a scale of 1 to 10, how cynical and slimy does a person have to be to believe that he can outright lie to the American people, and can do so because he believes they are too lazy to actually factcheck him? We will explore this in the next installment. And we’re not done with that stupid postcard by a damn sight either.
Part 2: Other Problems so Obvious I Had to Get Retinal Chemotherapy After Reading Them