Bringing up the rear in this the current presidential rest is Ted Cruz, presently senator from the state of Texas.
So what does Cruz propose to do for America if elected president?
Taxes
The most radical aspect of Ted Cruz’s policy platform is his tax reform proposal. He wants to completely eliminate the IRS, corporate taxes, and payroll taxes, and institute a value-added tax of 16% and a flat tax on income of 10%.
One of the benefits of this tax plan is its straightforwardness. According to the Tax Policy Center estimate, “just 2 million of the 45 million filers who would otherwise itemize in 2017 would continue to itemize deductions under the Cruz plan.” That’s mostly because Cruz plans to increase the standard deduction and eliminate all other deductions besides a scaled-back mortgage-interest break and the charitable deduction.
Another benefit might be an increase in economic efficiency. The plan eliminates taxes on investment income and allows businesses to deduct their capital expenditures so theoretically it would encourage businesses and individuals to save and invest more.
According to the Tax Foundation this would lead to much higher GDP and incomes for Americans of all income levels, if it were joined with enough spending cuts to finance the tax cut. In fact, the plan would have to call for massive tax cuts.
Economists, however, are divided over what effect tax rates have on economic growth and believe that the Tax Policy Center might just be overly pessimistic about the plan’s ability to deliver faster growth and higher incomes.
Additionally, those nearing retirement today would be negatively affected by the Cruz tax plan. People who have worked and have paid federal income taxes their whole life would be faced suddenly with a retirement in which they would pay a very hefty federal sales tax on everything they bought. For those still paying income tax, this would be offset by lower income taxes. But the retired, or nearly retired, would not be so lucky.
Entitlements
Cruz has offered few specifics on how he would manage to both cut taxes and at the same time defend popular programs such as social security and Medicare. He has pledged his support for Medicare and has argued for a gradual increase in the retirement age at which people can receive Social Security and for slowing the rate at which benefits grow. For people who are not “at or near retirement” Cruz wants to set up individual retirement accounts similar to how George W. Bush tried to reform the program a decade ago.
Immigration
Ted Cruz has taken a hard line against immigrants, despite the overwhelming evidence that growing the labor force through immigration helps boost economic growth and fortifies government budgets.
Cruz wants to build a border wall that “works,” triple border security, as well as put in place other types of security measures, like biometric tracking. He also would like to put the nation’s skill worker H-1B visa program on hold, and “halt any increase in legal immigration so long as American unemployment remains unacceptably high.”
With his hardline on immigration and his withdrawing support for the Trans-Pacific Partnership trade deal some economists believe that big business would be the big loser this election cycle. Although America’s largest companies are spending a tremendous amount of money on lobbying, they’ve been largely ineffective at getting any of their biggest priorities pushed into law. It doesn’t appear that a Ted Cruz presidency would change their situation.
Regulation
Big business would, on the other hand, be pleased with the Ted Cruz stance on regulations. He favors passing the REINS act, which would require a vote from Congress on any proposed regulation with an impact of $100 million or more—a drastic change from how the executive branch implements regulations today. This would represent a huge shift in power from the permanent bureaucracy to the elected legislature, offering wealthy lobbyists more say how the federal government relates to business.
Some economists believe that the role of increased regulation in slowing economic growth is of utmost importance. Other economists are more skeptical, arguing that it is difficult to measure the effects of business regulations, and that certain regulations could actually increase growth. They believe that if Ted Cruz wins the presidency and the Congress remains in Republican hands, the federal government would knock out certain regulations and slow the growth of new ones. This could end up showing rather clearly the effects of regulation on economic growth.