ICYMI: Sen. Cruz: To See Booming Economic Growth, We Need an Unapologetic Tax Cut

Press Releases|9.27.17

Appears on ‘Mornings with Maria’ to discuss his priorities for fundamental tax reform

WASHINGTON, D.C. – U.S. Sen. Ted Cruz (R-Texas) today appeared on Fox Business Network’s ‘Mornings with Maria’ to discuss President Trump’s tax reform proposal and his priorities for fundamental tax reform.

When Maria Bartiromo asked about President Trump’s tax proposal to be rolled out later today, Sen. Cruz highlighted that the focus of tax reform should be economic growth, fairness, and simplicity.

“Some of the early details are encouraging,” Sen. Cruz said. “I think the principles that should govern tax reform are growth, fairness and simplicity. Number one should be growth. The focus should be jobs and economic growth. And I think there are a lot of elements that we’re hearing that are encouraging in that regard.”

When asked about the proposed tax rates, Sen. Cruz highlighted the importance of bold simplicity, and his preference for a single flat tax.

“I would like to see those rates lower,” Sen. Cruz said. “I would like to see one simple flat tax. That’s what I campaigned on as you know in the presidential race, it’s what I’ve encouraged my colleagues to do. If we don’t have the votes to go there, going from seven rates to three is a positive step. Going from three to two is even better, going from two to one is even better. I think simplicity and being low is important. I also think for individuals being able to fill out your taxes on a postcard has a powerful, powerful impact of simplicity. We spend 9 billion hours a year in tax compliance. That’s an easy save. But I’ll tell you one of the first questions we’re going to debate in Congress and with the administration is how big of a tax cut are we talking about? This matters. I think it needs to be a tax cut, an unapologetic tax cut. A serious tax-cut. And the simplistic reason, if you want to see Reagan-era economic growth, if you want to see booming GDP, small business growing, you’ve got to have Reagan style tax cuts, real tax cuts. Not just deficit neutral adjusting, emptying one bucket and filling another. You’ve got to have a real tax cut on small businesses, on job producers, on working families. That’s how we unleash the economy.”

Sen. Cruz also emphasized the need for immediate expensing of capital expenditures.

“The direction I have been pushing and will continue to push, is bold and simple. That we can really have enormous impact. Let me give you an example. One of the most pro-growth reforms that can be included in tax reform, is immediate expensing of capital expenditures. When businesses spend money. When a farmer spends money to buy a tractor, he can expense that immediately instead of depreciating it over years. It’s a massive idea. When a steel factory, opens up a new factory, builds a new factory, or a plastics factory builds new equipment to hire new workers, immediate expensing is an enormous incentive for dollars spent here, to create heavy manufacturing jobs, to create jobs – the kind of blue collar jobs that have been the backbone of the American economy for decades. That’s a big deal. I think it’s important to have it in there.”

When Fox News Contributor and political editor for Townhall.com Guy Benson asked about the $20 trillion national debt and whether or not tax reform should be deficit neutral, Sen. Cruz emphasized the importance of economic growth to addressing the growing debt.

“If it’s [sic] deficit neutral, it’s not a tax cut. And one of the things to remember – the way Washington scores tax cuts, they consistently underestimate the economic growth impact of tax cuts.  One of the reasons I’m such a passionate advocate for a big serious tax cut, is because I’m very worried about the deficit and debt. And the only way we’re going to turn it around, is economic growth. There’s no way Congress is going to find the backbone to cut enough to get out of the debt. It’s just not going to happen. It’s not going to happen with Democrats, and it’s not even going to happen with most Republicans. The only way we get out of this hole we’ve dug ourselves, is getting out of the anemic, Obama-era one and two percent growth and getting back to robust three, four, five percent GDP growth. That generates so much revenue, that that’s how you end up paying down the deficit and debt.”

Sen. Cruz continued, “Since WWII our economy has grown on average 3.3 percent a year. From 2008 to today, it’s grown 1.2 percent a year. This is dismal – it’s miserable. And I’ll tell you, a lot of people in Washington are accepting this as the new normal. Now we grow one to two percent a year. Well you know, prior to Obama, the last four year period where you had economic growth less than one percent, was 1978-1982 – it was Jimmy Carter. Coming right out of the same failed economic policies. And what did Reagan do? In ‘81 he came in with a major tax cut, major regulatory reform – the economy took off.”