Area resident questions candidate’s tax plan
At this particular place in time, what astute politician would mess with senior citizen retirement benefits or pronounce tax increases before winning a select government seat? Well, believe it or not, Cruz has done an outstanding job in doing so.
He is very quietly running his campaign on a 19 percent VAT sales tax once he’s in office. Most people might say ho-hum — here’s another Repub budget-busting tax cut for the wealthy. Some of you may not be familiar with the term VAT of which I had to pay due to my stint working in Israel. This is a value-added tax federally based that applies to all purchases of goods and services made in the US or any other country. I’m beginning to wonder how many margaritas Cruz had when he approved this tax as one of his platform planks.
Actually, he’s not only wooing the rich but also corporations in replacement of a new flat business-related, corporate income tax with a broader base and lower rate. Actually, this is not his plan; his “business flat tax” is a sales tax, not corporate income, and it’s a 19 percent sales tax, not a 16 percent one that he professed.
A center-right think tank, The Tax Foundation, says this is known as a “subtraction-method value-added tax.” Further, they explain, “Its base is identical in economic terms to that of the credit-invoice VAT seen in many OECD countries.” TTF further explains that “Cruz is specifying his 16 percent tax rate ‘in tax-inclusive terms.'” In simple terms, this means that $1 today will cost $1.19 tomorrow in the US if Cruz wins.
Since 10 percent of the population owns almost 85 percent of the financial assets in the US, the bottom 75 percent (seniors, middle-class, the poor) owns less than 4 percent. This is a poisonous position, especially for seniors. Cruz’s sales tax would be a devastating blow to these classes of citizens. However, Cruz neutralized that by eliminating payroll taxes and giving a huge boost to the earned income tax credit. The TTF says that people at all income levels will be paying less in taxes under President Cruz. This range would be 29.6 percent for the top 1 percent to a modest 1 to 4 percent in the bottom half of the income distribution. However, this will leave a $3.7 trillion hole in the federal budget over 10 years.
Are you beginning to see what impact the Cruz tax plan will have on seniors yet? How many seniors do you know that work? Quite frankly, I know only two in my territory of 100 square miles. They are not paying payroll tax nor are they gaining any money from an increase in the Earned Income Tax Credit. Seniors pay less than 9 percent of their income in taxes, and they spend more than 100 percent of their after-tax income. In Mississippi where I live, the state’s sales tax is 7 percent. Therefore, on a $100 grocery bill, Seniors would only be able to realize $74 to spend on groceries. I never get out of Walmart for $100 worth of groceries — how about you? In actuality, this means a 19 percent cut in Social Security benefits with Cruz’s tax plan placing a deathly impact on seniors’ living standards.
Going back to 2012 in Cruz’s campaign, he endorsed cutting Cost Of Living Adjustments in Social Security for seniors. In addition, his current campaign has brought back to life Bush-style privatization schemes that the rest of the Repub party abandoned after they proved politically disastrous. So, now we are faced with a tremendous decision to make between Cruz’s treacherous schemes and the untried other top candidate, the Donald Trump. Actually, however, it seems the better part of living if I have to face the unknown rather than eating a can of dog food.
Ina Lynn Jurey lives in Union Church.