Tax Analysts Blog

Ted Cruz and His Dim-Bulb Tax Policy

Posted on Apr 1, 2015

Sen. Ted Cruz is like a 100-watt light bulb – very bright, but with the dimmer turned way down. By many accounts both brilliant and thoughtful, he seems happiest when channeling the simplistic and shallow. Especially when it comes to taxes.

Cruz has been getting attention for his tax views, especially his vocal support for a flat tax. But while Cruz has plenty of tax opinions, he doesn’t really have any tax policies – at least none that rise above the level of a sound bite.

Consider Cruz’s much-ballyhooed support for the flat tax. His position reduces to a few stray comments in campaign stemwinders and the occasional clarification from a staff aide. He doesn’t have a plan.

Cruz does, however, have a sales tax plan. He is a cosponsor of the Fair Tax Act of 2015, which would establish a national retail sales tax. In some respects, the FairTax is similar to a flat tax, since it would tax consumption using a single rate. (Also like a flat tax, the FairTax is not entirely flat, since it would provide a large exemption that would create progressivity at the bottom end of the income scale.)

But Cruz doesn’t seem very interested in the FairTax, beyond the interest required to attach his name as a cosponsor (i.e., not much). He doesn’t talk about the idea or engage the issues surrounding it. When asked, Cruz will still endorse the FairTax. But he prefers to talk about the flat tax, and especially its postcard-sized returns.

Still, the FairTax bill is the closest Cruz has ever gotten to real tax policy. I’m no fan of national sales tax proposals, but at least they’re ambitious and substantive.

By contrast, the rest of Cruz’s tax agenda is basically campaign bluster reworked as legislation.

Cruz is especially fond of legislation targeting the IRS -- I mean, protecting the American people from targeting by the IRS. He is the sponsor or cosponsor of several bills that would, variously:

• “prohibit the intentional discrimination of a person or organization by an employee of the Internal Revenue Service”;

• “prohibit the Internal Revenue Service from modifying the standard for determining whether an organization is operated exclusively for the promotion of social welfare for purposes of section 501(c)(4) of the Internal Revenue Code of 1986”; and

• “prohibit the Department of the Treasury from assigning tax statuses to organizations based on their political beliefs and activities.”

That’s a lot of prohibiting. Now, don’t get me wrong: I’m all for getting the IRS out of the business of evaluating political activities conducted by tax-exempt organizations (and those seeking that status). But Cruz’s fixation on this topic, which just happens to be a key Republican talking point, does not constitute a tax agenda.

(If you have any doubt about the partisan nature of all this legislation, consider the overheated rhetoric offered up by Sen. Jeff Flake in defense of S.283, the Stop Targeting of Political Beliefs by the IRS Act of 2015. This bill, which Cruz cosponsors, is designed to “stop cold further attempts by the Internal Revenue Service to exploit bureaucratic loopholes to restrict the free speech rights of the same tax-exempt social welfare organizations victimized in the IRS political targeting scandal.” )

The rest of Cruz’s track record on tax policy is similarly modest in ambition and political in nature. Even S. 249, the Operation United Assistance Tax Exclusion Act of 2015, manages to inject politics into an otherwise nonpartisan piece of legislation. The bill, which Cruz sponsors, would create a tax exclusion for compensation paid to members of the armed forces fighting Ebola in Africa. Which is great – soldiers fighting Ebola should definitely get the same tax benefits as those serving in combat zones.

But Cruz just couldn’t resist the urge to politicize even this sort of do-gooder legislation, insisting that the tax benefits would only be available to those service members who agreed to “a program of not less than 21 days of controlled monitoring in a controlled monitoring area upon the individual's return from the Ebola virus disease outbreak area.” Pandering to Ebola fears proved helpful to Republicans running in the elections last fall, so why not stoke the fires again?

For Cruz, taxes are about showmanship, not policymaking. Which should surprise no one, since his entire political career has been about posturing, not policy. As a political historian, I can respect a good performer on the political stage – people like Huey Long, Franklin Roosevelt, Barry Goldwater, and Ronald Reagan. But those performers, for better or worse, took policy seriously.

Of course, Cruz’s empty showboating may be a sign of that wicked intelligence he is said to have. After all, it's not clear that policy details are helpful to a presidential candidate; when it comes to campaign platforms, the vaguer the better. Just ask Mitt Romney.

But that doesn't excuse Cruz’s anemic track record on legislative tax issues. Cruz’s Senate career is an example of public service minus the service. No doubt some will see his policy-free ideological posturing as a service to the conservative cause. But it's not. Conservatives need serious ideas from serious people – something Sens. Mike Lee and Marco Rubio, for example, seem to understand.

Increasingly, Washington is alive with interesting, conservative tax proposals. But none of them are coming from the junior senator from Texas.

Read Comments (2)

edmund dantesApr 3, 2015

I realize that you consider the weaponization of the IRS to be a minor
distraction. For those who have been subjected to these politicized witch
hunts, it is a very big deal, and there have been a great many victims. Some
groups have waited 5 years for IRS action on their applications, and they are
still waiting. The fact that the IRS can't be held accountable for what are
almost certainly crimes against taxpayers is causing a catastrophic loss of
trust in the agency among the populace at large.

A call to "abolish the IRS" should be understood as "create a completely new
tax collection agency with all new employees, an agency with robust safeguards
against politicization and rapid, severe penalties for employees who abuse
their positions to advance personal political agendas." But that's not a good
sound bite. "No more Lois Lerners" is.

Fundamentally, Cruz is saying that serious tax reform is pointless when we
can't trust the IRS to implement fairly what we enact. Today's IRS would
certainly use its regulatory authority to undermine any conservative tax
changes. We know this because the IRS has demonstrated its political bias by
using its regulatory authority expansively in support of changes promoted by
liberals, most notably Obamacare.

We must purge the IRS of its politicization, or we are going to lose the
ability to collect taxes at all. Cruz is on the right track after all.

jrApr 13, 2015

I'm confused...

In light of a few straggler cases of Ebola where appropriate protocol was not
followed, why is a prudent policy attaching benefits to appropriate address of
public health concerns a partisan issue? Because a Republican said it was a
good idea at some point?

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