Ted Cruz’s proposal for a ten percent flat income tax and a 16 percent value-added tax might give him some headlines in the coming days, but I think that his tax proposal is a strategic mistake. It will hurt him with the people he needs to put him over the top in getting the Republican nomination.
Cruz already has a shot at becoming the candidate of Tea Party dissidents who doubt the Republican Party is serious about repealing Obamacare, and social-conservatism-first voters who know that the national Republican establishment cares more about reauthorizing the Export-Import Bank than restricting late-term abortion.
Those two groups just are not large enough to win the nomination. Cruz is going to have enormous trouble winning the “somewhat conservative” voters who are the single largest group within the existing Republican nominating electorate. These voters are on the right, but they prefer (as Henry Olsen wrote) “even-keeled men with substantial governing experience.” These votes might go vote for Cruz over Clinton in the general election, but they won’t vote for Cruz over Rubio/Kasich/Christie in the primaries. Middle-class and affluent moderate and liberal Republicans are also not going for Cruz.
Cruz’s best chance is to expand the electorate and win the populist working-class, moderates that are currently supporting Trump. Olsen has already pointed out why Cruz is not the obvious second choice for these voters. A flat tax, plus a VAT, plus Social Security private accounts isn’t going to get it done with these voters. If anything, these policies are counterproductive.
Cruz would have been better off attacking Rubio as a sellout and a liar on immigration while competing with Rubio on offering policies that directly benefited wage-earners. Cruz could have pointed out that both of them were elected as Tea Party opponents of upfront amnesty, but that Rubio buckled to the pressure from the lobbyists in Washington. Cruz could have pointed out that Rubio can’t stop lying about what kinds of immigration policies he supports. At the same time Cruz could have proposed expanded child tax credits for working parents and something like Scott Walker’s health care plan to make sure that a layoff doesn’t mean your family loses insurance. This would show that conservative populism has direct benefits for wage-earners as well as entrepreneurs.
That wasn’t the way that Cruz went, and it is probably too late for him to change course. If it does come down to Rubio and Cruz (and it might not), they would divide the Republican coalition in two. Cruz would get populist conservatives and social conservatism-first voters. Rubio would get somewhat conservatives and middle-class moderates. Rubio’s coalition is bigger. The working-class moderates who might have provided Cruz’s margin of victory probably won’t even vote. Why should they? Nobody has given them a reason.