Senator Ted Cruz of Texas has suggested a taxes plan that involves a rather uncommon tax not presently seen in america. I’m pre-emptively writing this post to try to help people know how this tax would work, because in my experience hardly any American journalists or economists know how it could work even. It’s just a little simpler than the fancy nomenclature would suggest actually, and it could be explained through its similarities with existing U.S.
I’ll make an effort to make this a little easier here. What Is Ted Cruz’s Business Flat Tax? Ted Cruz’s “Business Flat Tax” is exactly what most tax plan experts would call a “tax-inclusive subtraction-method value-added tax” (VAT) or a “business transfer taxes” (BTT). These conditions are pretty technical, so I’ll make an effort to distill them down into something a bit easier.
What this implies, in plainer terms, is that it’s a broad tax on all kinds of income, levied on businesses and organizations. You, personally, wouldn’t have to file it for yourself. Instead, it would be looked after at the organizational level. That will not, of course, mean it’s free.
When businesses pay fees on people’s behalf, it still eventually means that the national government gets some money that otherwise would have gone to people. Further on, we’ll talk about who would finish up losing profits from the existence of this tax. How WOULD IT NOT Apply To an Ordinary Business’s Income? The starting point for a subtraction-method value-added tax is fairly …