Ted CruzTed CruzTexas Dem targets Sen. Ted Cruz in 2018 What are 'religious liberty' bills really about? Fiorina calls for special prosecutor for Russia probe MORE’s tax plan would cost less and stimulate the economy more than Donald TrumpDonald TrumpTrump daughter-in-law joins Trump campaign digital vendor: report Live coverage: Senate intel holds first public Russia hearing Federal judge extends order blocking Trump's revised travel ban MORE's, a recent analysis found.
“Of the two proposals that we have examined so far, those by Trump and Cruz, we find the Cruz proposal to be the better of the two,” said David Tuerck, executive director of the Beacon Hill Institute and senior fellow at the National Center for Policy Analysis. The free-market groups released a report comparing the economic effects of the tax plans from the two Republican presidential candidates.
Trump’s plan would lower the top individual income tax rate from 39.6 percent to 25 percent.
Cruz’s plan would impose a single individual income tax rate of 10 percent and would eliminate payroll taxes. He would replace the corporate income tax with a 16 percent business flat tax that is often seen as a value-added tax.
One reason why Cruz’s plan would lead to both less revenue loss and more economic efficiency than Trump’s plan is that it "goes further than the Trump plan toward turning the tax code into a tax on consumption,” the report said.
In 2026, Trump’s plan would lower government revenue by about $800 billion, while Cruz’s plan would only cost about $550 billion, according to the report.
Cruz’s plan would increase real gross domestic product (GDP) in 2026 by about 8 percent, while Trump’s plan would only increase real GDP by 2.61 percent, the analysis found.
Both plans would lead to a decline in public-sector jobs but an even larger increase in private-sector jobs. Total employment would increase in 2026 by 1.56 percent under Trump’s plan and by 2.74 percent under Cruz’s plan, according to the report.
Cruz’s plan would also increase business investment and personal income more than Trump’s plan would, the report found.