Cruz, Kasich, and Trump: The Tax Comparison

Tax

Of the three remaining candidates for the GOP nomination, the differences are stark when it comes to their plans to change the tax system in America.

While the media has browbeaten frontrunner Donald Trump for his lack of specifics on all of the issues, his published tax plan is fleshed-out with final details addresed in September.

John Kasich on the other hand has buried his tax plan as in a head-to-head battle, the Ohio governor’s plan looks like more of the same, while he refers to the other candidates’ tax plans as “fantasy plans.”

Here’s the breakdown:

Personal Income Tax:

• Cruz: 10% flat tax. Increase in the standard deduction to $10,000 per filer. Kills the payroll tax.
• Kasich: Three tax brackets. Top rate of 28%.
• Trump: Four tax brackets. Top rate of 25%. No taxes on less than $50,000 in earnings.

Personal Deductions:

• Cruz: All deductions eliminated except for charitable and mortgage interest.
• Kasich: Same as Cruz.
• Trump: Phases out all deductions aside from charitable and mortgage interest.

Personal Income Tax Credits:

• Cruz: Kills all tax credits with the exception of the Earned Income Tax Credit and the child tax credit. Earned Income Tax Credit is increased by 20%.
• Kasich: Nothing specific aside from increasing the Earned Income Tax Credit by 10%.
• Trump: Maintains the Child Tax Credit and the Earned Income Tax Credit.

Corporate Income Tax:

• Cruz: Kills corporate income tax and replaces with a 16% “business transfer tax” that applies to income and labor payments.
• Kasich: Drops the top corporate rate to 25%.
• Trump: Lowers the top corporate rate to 15%.

All three candidates propose killing the death tax.

Who has the “best” plan?

If all three were a reality, Ted Cruz’s 10% flat tax would be a winner, however the candidate’s proposed 16% “business transfer tax” would be a killer.

The confusing plan is best described as a subtractive sales tax. So if you pay $20 for a new shirt at Old Navy, under Cruz’s 16% proposal, the retailer would get $16.80 and the government would take $3.20.

It can be seen as a non-additive sales tax or a gross receipts tax, both of which would increase the cost of goods and services by 16%.

With all of the “good” behind Cruz’s flat tax proposal on personal income, the “bad” behind the candidate’s corporate tax proposal cancels it out.

While Kasich’s plan is an improvement on the current oppressive tax rates, at best, it drops personal tax rates by 11.6% and the corporate rate by 14%.

Trump’s plan, which dips the top personal rate to 25% also frees a large portion of Americans from taxes altogether. Some will see this as an expansion of the Welfare State, however Trump’s corporate plan is a winner as it cuts the business taxes in half.

Again, who is the winner?

Donald Trump by a hair.

Trump’s plan makes the most sense for those who understand Reaganomics or Trickle Down Economics.

If Cruz would drop his “business transfer tax” and offer up a 15% or lower tax rate, he could win over the business world with ease.

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Norma Goss
A native of Richmond, VA, Norma Goss a long-time contributor to Citizen Action, but considers her full-time job being a stay-at-home mom to her four daughters. She's a lifelong advocate for conservative policies.