Ted Cruz promises to scrap the current tax code and the Affordable Care Act. We take a look at what would this mean for your career and bank account.
The Democratic field is easily defined, even if the winner is still very much in doubt. The Republican field, on the other hand, has seen Ben Carson go from co-frontrunner to all but out of the race in the span of three months. We’ll look at the top Republican candidates (Donald Trump, Marco Rubio, and Ted Cruz), with an eye on John Kasich or Jeb Bush should either emerge like a phoenix from the ashes.
When we wrote about the candidates’ positions for our sister site, MD Magazine, a few months ago, Texas Senator Ted Cruz didn’t even get his own post; he was included in a “catch-all” covering all the other candidates. Since that time, Cruz has emerged as a contender; no surprise considering his conservative leanings. But what would a President Cruz mean for your personal finance and for healthcare overall?
Limited government…and no more Internal Revenue Service?
One of the stanchions of conservative politicians is the idea of limited government and the support of a free-market economy. Cruz is as conservative as they come in this regard, and he has vowed throughout his campaign to reduce government spending and debt. Cruz was among many Republicans who signed the Contract from America, which included as one of its major tenets the balancing of the budget.
As for how he would balance the budget, that has been the subject of a great deal of discussion and debate. In a “go big or go home” gambit, Cruz has proposed essentially eliminating the current tax code, along with the Internal Revenue Service, the notorious-to-some agency that enforces tax collection. Cruz’s plan would institute a flat 10% tax for all workers who earn more than $36,000 per year, and it would make up the several-trillion-dollar shortfall created by that loss by adding a 19% business flat tax that would replace corporate income taxes and payroll taxes.
The plan is ambitious, but economic experts are split on both the feasibility of this plan and its overall impact on individuals, investors, and small business owners, which include many physicians. The business flat tax is a form of value-added tax (VAT), a complicated concept you may have heard of. VAT taxes are a reality in every major world economy except for the United States, but some economists believe VAT taxes, which essentially tax earnings at each step in the production and sales process, shift tax burdens to middle class consumers of goods and services.
Unlike the vague platitudes espoused by the current GOP frontrunner, Cruz has included specific numbers with his plan, including where he would cut public spending, how much the new tax structure would generate, and what the impact on US businesses would be. But there is clearly a lot of speculation in those numbers; it is very difficult to project what an overhaul of this magnitude would ultimately mean.
Cruz on Healthcare
While all the GOP candidates include repealing the Affordable Care Act (ACA), Cruz is perhaps the Republican poster boy for the cause, and his leadership on this issue has helped his resurgence in conservative states. Before the ACA went into effect in January 2014, Cruz filibustered for 21 hours, and he has introduced several pieces of legislation aimed at repealing the ACA. Cruz introduced a plan last past spring, called the Health Care Choices Act, which includes among its tenets the ability to purchase health insurance across state lines. Cruz has made encouraging medical innovation, increasing funding for research around diseases both rare and common, and increasing the pace of finding cures for deadly diseases a central focus of his political career and his candidacy. He is staunchly pro-life.
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