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Details Count: The Three Pillars of Senator Cruz’s Economic Growth Plan

April 26, 2016 0 Comments

As I listen to the latest harangue over how delegates are selected, and what the voters voted for, I can’t help but wish people would remember this: Details matter. Those who dismiss the details – the rules – on delegate selection today will dismiss the details – the rules – on what the Constitution says tomorrow. Throughout history, we have seen leaders arise who demagogue this or that set of rules. They promise to throw the rules out and do what they think is right in the name of “the people.”

History has one word to describe such leaders, be they from the past, the future, or the present.


Exit polls from the New York primary indicate that the number one concern of Republican primary voters was the economy and jobs (37%). The same was true for Democrat primary voters (35%). So, it would make sense that voters would want a candidate with a tax plan that will “Make America Great.” However, after quoting Donald Trump’s response to a question about his own plan on the Greta van Sustern show, Judd Legum writing for Think Progress, wrote: “Trump is either completely unfamiliar with his actual tax plan or is blatantly lying about it.”

I would prefer a candidate who not only understands his own tax plan, but has written and spoken about it often. And so, as someone who teaches introductory economics at several colleges in Indiana, I want to explain why I support Ted Cruz’s tax and economic plan. I do so to help you, the reader, understand the details of 3 pillars of his economic plan. Additionally, I’ll conclude with why I believe it is realistic to believe that “The most hated man in Washington” can get his plan passed.

Three Pillars of Senator Cruz’s Tax Plan

Pillar Number 1:  Cruz’s flat individual tax rate of 10% would apply the Buffet Rule the Democrats only talk about.

FDR, the Democrat whose tax policies Bernie Sanders worships, created a system that taxed the poorest Americans 4% on their first $4,000, and the richest Americans 79% (1936 federal income tax rates, After exempting the first $36,000 of income, Cruz would apply a flat 10% tax rate to all forms of income, be it from W-2s that most working Americans, like Warren Buffets’ secretary, earn, to profits, capital gains, dividends and interest income that people like Mr. Buffett, Bill and Hillary Clinton earn. Bernie Sanders and Hillary Clinton talk about a “Buffet Rule.” Ted Cruz has spelled out the details.

What does Mr. Trump say about the details of his plan? “But the very rich are going to end up probably paying more but there’s an incentive for them to invest in the country and to create jobs.” Probably???? That’s reassuring.

Pillar Number 2: Cruz’s Net Business Income Tax of 16% increases investment by 44%, creates 5 million jobs, and gives US companies an incentive to bring jobs back to the US, according to the Tax Foundation’s analysis of the Cruz plan.

Right now, if you purchase a $10,000 machine for your business, you depreciate that asset over a seven year period. Under Cruz’s plan, you can count 100% of the purchase against your income in the year you bought it. This is REAL “accelerated depreciation” which will give entrepreneurs an incentive to invest in their businesses IMMEDIATELY. Additionally, imports would be taxed at 16%, but when US companies export their goods, they would pay no tax. What this means is that if a company, like Carrier Corporation, goes to Mexico, anything it sells back to the US will be taxed 16%. But, if they relocate to the US, say back to Indianapolis, and they export their product to other countries, such exports would not be taxed. This feature of the Cruz tax plan will bring jobs back to the United States from overseas.

Trump says he’ll bring jobs back to the US, but what are the details of his plan?

Pillar Number 3: Cruz will create a Tax Deductible Savings Account that can be used for any reason.

Today, you can put money into your IRA tax deferred, but you can’t touch it until age 59 ½. But what if you need it NOW? Or, what if you want to leave your job and start your own business? Did you know that as a business owner, you can’t collect unemployment insurance if your business fails? Today, in this Obama economy, the risks are high that your business will fail. This riskiness, plus the lack of a “safety net,” prevents people from starting a new business, and it’s one reason why for the first time in 35 years, American business deaths outnumber business births. But what if you, as an entrepreneur, had access to a personal savings account to fall back on? Cruz’s deal for America would help you create your own personal safety net so that you, not the government, can bail yourself out if needed.

What are the details of Trump’s deal for America? If we’re going to make America “Great Again,” someone is going to have to pay attention to the details.

How Does the Most Hated Man in Washington Get His Plan Passed?

In one of my economics classes I teach at the college level, my students have been looking at the tax plans of the various candidates. After looking at Cruz’s plan, I asked them to vote as to whether or not they felt it was realistic for Cruz to get his plan passed. Only 17 percent of the students thought it was realistic.

But then, I pointed out that Senator Cruz has been going around the country speaking to the grass roots and getting delegates, like the 34 delegates he won in Colorado. I also noted that Cruz has been creating a comprehensive data set of political activists around the country to help him get elected. Then I asked them to think about how Cruz will be able to contact these people when, as President, he wants to put pressure on the establishment in Washington to pass his proposals. When I asked the students if this ability to go directly to the American people to get his program passed was realistic, the percentage of students who felt that passing his plan increased to 67%!

So, bottom line, here is what Senator Cruz is offering: A detailed plan that creates a simple, fair, flat income tax that enacts the “Buffet Rule” so that everyone, rich and poor, are treated fairly. A tax plan that will bring back jobs from overseas. A vision for how to incentivize American entrepreneurs to start new businesses by creating a personal savings account. And the creation of an army of political activists who will force the power brokers in Washington to do what is right for the people instead of the crony capitalists.

Not only does Ted Cruz have a detailed plan to make America great again. He has the courage, brains, and the determination to get the job done.

David Lantz teaches economics for several Indiana Colleges as an Adjunct Professor. He was voted Faculty of the Year by the first graduating class of students from the Indianapolis Campus of University of Phoenix. Mr. Lantz’s views are his own, and do not necessarily represent the institutions for which he teaches.

Filed in: Economics Matters

About the Author:

David Lantz is a self-published author, adjunct college professor and leadership consultant. Visit my online courses at and like my facebook page at and

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