They recently wrote in Investor's Business Daily:
When we designed our Complete Flat Tax in our book "Return to Prosperity," we came up with this business tax system with no deductions, simple as can be...But in their article they are much more open about the fact that the Paul and Cruz tax plans does include a VAT. A point that Paul and Cruz never mention:
Criticizing the Cruz and Paul VATs based on worries about providing too much revenue to government is like arguing against cutting the capital gains tax rate — because every time we cut that rate, the feds get more revenue.A VAT tax is particularly evil because of the hidden way the tax is applied, which makes it difficult for the citizenry to understand how much they are being taxed.
Murray Rothbard notes:
The VAT is essentially a national sales tax, levied in proportion to the goods and services produced and sold. But its delightful concealment comes from the fact that the VAT is levied at each step of the way in the production process: on farmer, manufacturer, jobber and wholesaler, and only slightly on the retailer.
The difference is that when a consumer pays a 7 percent sales tax on every purchase, his indignation rises and he points the finger of resentment at the politicians in charge of government; but if the 7 percent tax is hidden and paid by every firm rather than just at retail, the inevitably higher prices will be charged, not to the government where it belongs, but to grasping businessmen and avaricious trade unions.
While consumers, businessmen, and unions all blame each other for inflation like Kilkenny cats, Papa government is able to preserve its lofty moral purity, and to join in denouncing all of these groups for "causing inflation."
It is now easy to see the enthusiasm of the federal government and its economic advisers for the new scheme for a VAT. It allows the government to extract many more funds from the public — to bring about higher prices, lower production, and lower incomes — and yet totally escape the blame, which can easily be loaded on business, unions, or the consumer as the particular administration sees fit.
The VAT is, in short, a looming gigantic swindle upon the American public, and it is therefore vitally important that it not pass. For if it does, the encroaching menace of Big Government will get another, and prolonged, lease on life.For this reason alone, I believe Rand Paul and Ted Cruz must be dismissed as candidates that can be supported in the 2016 presidential race.