That’s right, by the time it gets to the consumer the tax paid is actually far more than 16%. If the business makes cookies it has to buy sugar with a 16% tax on it, all products that go into making the cookies have had the 16% added on which increases the COST of the cookie, then there is an additional 16% tax added on for the consumer to pay.
yes indeed. again, thanks for the information, and thanks to the author of the article. it is hard data about cruz and his thought processes.
rare, objective data on which one can actually base an evaluation. it’s the accumulation of these kinds of posts on FR that build up one’s knowledge to a point where a good decision is possible about a candidate.
again, thanks. i hope you repost over several days.
Hmmm..
Not really a huge Cruz supporter but let me ask this:
If it replaces the business tax of 34 % with a 10 % tax and it is applied to the full price of any import, does it not effectively do exactly what Trump was with regards to making US business more competitive with Tariffs?
say the VAT is 15 percent. So Ford when it sells a car adds 15 % to the added value of the car it sells (deducting labor and parts), not on the entire cars cost, just the value added.
But Honda, which is making the car overseas has to add the VAT to the entire cost of the product, as it has not been taxed at all prior.
Combined with the lower business tax rate of 10 % it would make US business much more competitive, or so I would think.
Also if not applied to overseas sales, it would make US exports much more competitive, as there would be no VAT tax applied to exports.
Feel free to correct me if there is an error in my judgment, but having ben involved in selling US good into the EU, the VAT tax is one of the ways they make us goods less competitive.
Also, while I do not think Cruz can get a flat rate of 10 %, if he can get under 15 % and apply that to all income regardless of source it would make more tax payers which would move things in the right direction.
Not that I am a huge Cruz fan, but to be honest for the first time I see a means by which his economic plan might be very good for us businesses. I may have to eat some crow from Cruz fans I have said that Cruzes plan offers nothing to Northeastern middle class folks.
Feel free to correct me if there is an error in my thinking.