Rubio, Cruz trade fire on taxes

Rubio, Cruz trade fire on taxes

Sens. Marco RubioMarco RubioBush ethics lawyer: Congress must tell Trump not to fire Mueller The private alternative to the National Flood Insurance Program  Cruz offers bill to weaken labor board's power MORE and Ted CruzTed CruzEx-CBO directors defend against GOP attacks on ObamaCare analysis Cruz: GOP will 'look like fools' if ObamaCare isn’t repealed The GOP Wonder Women who saved healthcare for 22 million MORE sparred over taxes during Thursday night's Republican presidential debate, with Rubio accusing Cruz of proposing a value-added tax (VAT).

Cruz's plan includes a 10 percent individual income tax and a 16 percent tax that the Texan calls a "business flat tax." The latter tax has been viewed as a VAT by Rubio and others, including the free-market Tax Foundation, which has calculated estimates of the costs of candidates' tax plans.

Rubio criticized VATs, which are common in Europe, because they tax both the money businesses make and the money they pay their employees. He said that former President Reagan opposed VATs because they were a "way to blindfold the people."

The Florida senator also called a VAT "really bad for seniors," because they are no longer earning income but have to pay higher prices on goods. He expressed concern that the business tax could be increased at a later date, along with the income tax.

Cruz denied that his tax plan creates a VAT, saying his tax is imposed on businesses rather than on sales. He said that his tax would allow him to eliminate the corporate income, estate and payroll taxes.

Cruz also took a swipe at Rubio's tax plan because it includes a top individual tax rate of 35 percent and does not abolish the Internal Revenue Service.

"We need to break the Washington cartel," he said.

Rubio said that Cruz wouldn't be able to get rid of the IRS.

"You may rename the IRS but you're not going to abolish the IRS because there has to be some agency that's going to collect your VAT tax," he said.