A foundation official, Kyle Pomerleau, told us that what Rubio said largely holds up, though it would be wrong to conclude businesses under Cruz’s plan would pay 16 percent on the same money twice.

We next turned to the Tax Foundation, an independent tax policy research group. The current payroll tax system will be abolished, while maintaining full funding for Social Security and Medicare.” Cruz further says the business flat tax “will be based on revenues minus expenses such as equipment, computers, and other business investments.” It will be replaced by a simple Business Flat Tax at a single 16 percent rate. “For businesses,” Cruz says there, “the corporate income tax will be eliminated. On Cruz’s website, we spotted no direct indication the 16 percent would apply to payroll spending. The Child Tax Credit will remain in place,” Cruz proposes, and the plan revamps the earned-income tax credit while preserving deductions for charitable contributions and mortgage interest payments. For a family of four, the first $36,000 will be tax-free. “Under the Simple Flat Tax,” Cruz says on a campaign Web page, “the current seven rates of personal income tax will collapse into a single low rate of 10 percent. We turned to Cruz’s tax plan as outlined by his campaign. Does it also make businesses pay 16 percent on profits and payroll, as Rubio said? It goes away.”Ĭruz’s plan replaces the corporate income tax, the payroll tax and others with a flat tax. They will also have to pay 16 percent on the money they pay their employees.”Ĭruz disputed that characterization, saying in part that “a critical piece that Marco seems to be missing is that this 16 percent business flat tax enables us to eliminate the corporate income tax. Businesses will now have to pay 16 percent on the money they make. Rubio of Florida said that, under the plan advocated by Cruz, businesses basically “will have to pay a tax, both on the money they make, but they also have to pay taxes on the money that they pay their employees.”Ī moment later, Rubio said Cruz’s plan “does not eliminate the corporate (income) tax or the payroll tax. In the recent Republican presidential debate in North Charleston, S.C., U.S.

Ted Cruz’s tax plan, envisioning tax returns that fit on postcards, would whack businesses twice over, Marco Rubio says.

Ted cruz flat tax