Currently the very rich use carried interest, life insurance schemes, and even long term capital gains to pay a 15% tax rate rather than the 42% marginal rate on their ordinary income.
This is not transparent, it is not conservative. It is government doing social engineering in the tax code. How is that conservative in your eyes ?
His tax plan lowers the top rate from 42% to 25% on ordinary income. It eliminates the carried interest and life insurance schemes so those people will pay 25% rather than 15%. That is raising taxes on the rich. For people with income above $300,000 their long term capital gains will go up to 20% rather than 15%, so that is raising taxes on the rich as well.
That is hardly “soaking the rich”, however. It is eliminating the government preference for passive income. Eliminating government preferences from the tax code is conservative.
I am not a fan of Trump’s tax plan. It is still too progressive for my taste. It still allows way too many people a free ride.
But ... this article is flat out wrong. There are, in fact, tax increases for the rich in his published tax plan. His statements are not contradictory, and his plan is more conservative than the existing tax system — even if it doesn’t go as far as it should to a flat tax with no deductions or credits. Of course, Cruz’s tax plan is worse than the current system — a single rate plan on income but one that retains government preferences and then adds a huge 16% VAT on all purchases.
It is hardly his fault that the author — and you, apparently — have not bothered to read or understand his published tax plan. You complain about how “simple-minded” his plans are, but you are the one who failed to read the details of the plan. That is dishonest of you.
“I am not a fan of Trump’s tax plan. It is still too progressive for my taste. It still allows way too many people a free ride.”
I agree with you on both points. Even if his plan is as you have explained it, I’m not a big fan of increasing capital gains at any level. I also am not happy with 50% people getting “a free ride”. As one other freeper mentioned here, they should all have to pay something, even it starts at 1%.
I also take more stock on what Trump speaks, then what his tax plan says. He said he wants to tax the “rich”. I take at his word on that. He may be referring to what you have explained, but as he has on many issues, his words drift way further into liberal speak than I care to hear.
Furthermore, I think you and other Trump supporters have taken an overly simplistic, misleading euphemism to describe Cruz’s tax plan by saying he favors a VAT. The VAT, as you term it, is actually a flat 16% business tax that is supposed to replace payroll taxes. Please explain to me how exactly that increases the costs of goods and services, because I don’t see it.