An Analysis of Ted Cruz’s Tax Plan
The Tax Policy Center estimates that the proposal would reduce federal revenue by $8.6 trillion over its first decade and an additional $12.2 trillion over the subsequent 10 years, before accounting for added interest costs or considering macroeconomic feedback effects.1 Most of the revenue loss would stem from repealing payroll taxes ($12.2 trillion), cutting individual income taxes ($11.9 trillion), and eliminating the corporate income tax ($3.5 trillion). The VAT would raise $19.2 trillion over the decade, offsetting only 70 percent of the cost of the tax cuts
.. In 2017, the proposal would cut taxes at every income level, but high-income taxpayers would receive the biggest cuts, both in dollar terms and as a percentage of income. Overall, the plan would cut taxes by an average of about $6,100, or about 8.5 percent of after-tax income.
.. However, the highest-income 0.1 percent of taxpayers (those with incomes over $3.7 million in 2015 dollars) would experience an average tax cut of more than $2 million in 2017, nearly 29 percent of after-tax income. Households in the middle of the income distribution would receive an average tax cut of $1,800, or 3.2 percent of after-tax income, while taxpayers in the lowest quintile would receive an average tax cut of $46, or 0.4 percent of after-tax income.