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Overshadowed by the other night’s brawl pitting CNBC against the Republican presidential candidates was the release of Ted Cruz’s flat tax plan. The Texas senator and White House hopeful would impose a 10 percent tax rate on wage earners and a 16 percent business tax and no deductions.
“Flatter rates,” says Mr. Cruz, “will make for a more rapid-growth economy.” He’s right: in virtually all the cases of the last 100 years, lower tax penalties on working and investing have led to more jobs and higher incomes.
It comes on the heels of a plan from Sen. Rand Paul to adopt a 14.5 percent flat tax. For full disclosure, I’m biased because Sens. Paul and Cruz borrowed their flat tax plans with a few of their own unique twists, largely from my book with Arthur Laffer, “Return to Prosperity.”
The bigger story here is that it’s now official: Every major Republican candidate has endorsed lower tax rates and fewer loopholes as a way to make our federal tax code fairer and more competitive for American businesses.
The spirit of tax reform is alive and well on one side of the aisle.