Is Ted Cruz the New Champion of the Flat Tax?

Cruz is wise to champion a flat tax early on in the presidential race for the White House, it may be enough to tip some undecided Republicans over to him, especially non-social conservatives who have not yet warmed up to him. He has a long history of advocating for a flat tax. And if he does become president, Cruz is the aggressive, gutsy type of leader who will make it happen.


By Rachel Alexander l April 8, 2015

Announcing his 2016 presidential run at Liberty University last month, Ted Cruz, the first out of the starting gate, excited fiscal conservatives with his call for a flat tax to replace the IRS. Support for the concept has been picking up steam recently, due to the IRS targeting conservatives, becoming the selected enforcer of ObamaCare and the increasing unfairness of the existing tax system, hitting some Americans worse than others during the brutal economic downturn. During the 2012 election, Republican candidates Herman Cain, Newt Gingrich and Rick Perry all called for a flat tax.

“Instead of a tax code that crushes innovation [and] imposes burdens on families struggling to make ends meet,” Cruz said, to loud cheers, “imagine a simple flat tax that lets every American file his or her taxes on a postcard. Imagine abolishing the IRS.

While there are some libertarian idealists who prefer to switch to the “Fair Tax,” replacing the IRS with a national sales/consumption tax, pragmatists know it would never work. The entrenched establishment in Congress would never completely eliminate the IRS, but would instead merely add a second layer of taxation to the existing system. Getting the mortgage industry to agree to eliminate the mortgage interest deduction, for example, will be a tough battle. The only way to really eliminate the IRS is to set up a competing system that cannot coexist with it. Not to mention that a consumption tax would disproportionately affect the poor and middle class, who spend more of their incomes than do the wealthy.

The left makes fun of the possibility of eliminating the IRS, claiming it is too difficult to change the system and too complicated to implement a flat tax. Wonkblog’s Matt O’Brien writes, “It’s a fiscal fantasy for people who wish the U.S. existed as it did before FDR was president.” But how many things have taken place in politics that have been thought impossible? They occur every day. Additionally, the IRS is so complex now that it is laughable to argue that a flat tax won’t work because it will be too complicated.

In fact, “complicated” resides with both the current tax system and the so-called Fair Tax.

It’s been widely reported that the federal tax code grew to 3.8 million words by February 2010 from 1.4 million words in 2001. Today the tax code exceeds 5 million words and is steadily spiraling out of control. Americans consume 6.1 billion hours a year complying with the federal tax code and it’s estimated they spend over $140 billion a year just for tax preparation.

A flat tax can be simple and straight forward not complicated like the Fair Tax, which will also require the insurmountable task of repealing the 16th Amendment, leaving us with a national sales tax and a national income tax – chaos in the making.

Unfortunately, the Fair Tax as a national sales/consumption tax would replace the current income tax and establish an equivalent “IRS” enforcement agency by creating the “STB” or the Sales Tax Bureau vested with coercive audit and collection powers similar to those of the IRS – as would the state sales-tax authorities that would be working with the STB to run the Fair Tax system.

The day after Cruz’s announcement, the Wall Street Journal in a generally not-so-supportive op-ed piece tellingly did state, “In his announcement speech at Liberty University, he signaled support for a flat tax. Sign us up.”

Cruz is wise to champion a flat tax early on in the presidential race for the White House, it may be enough to tip some undecided Republicans over to him, especially non-social conservatives who have not yet warmed up to him. He has a long history of advocating for a flat tax. And if he does become president, Cruz is the aggressive, gutsy type of leader who will make it happen.


Rachel Alexander is the founder of the Intellectual Conservative and an attorney. Ms. Alexander is also a contributor to SFPPR News & Analysis.

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