COLUMBIA, S.C. -- Before a town hall meeting with Sen. Ted Cruz (R-Tex.) got underway at the University of South Carolina on Friday, a man in a baseball cap quickly delivered fliers to reporters, then hot-footed it out the door. The folded document he had dropped like napalm was actually fairly wonky, as these things go. It portrayed Cruz, on a background of the European Union's flag, as a supporter of a new tax on all goods.
Sen. Marco Rubio had deployed this attack in Thursday night's debate, two hours down the road, after days of referring to a mysterious "candidate" who wanted a "new tax." Cruz, who almost always pledges to audiences that he will "abolish the IRS" -- and sometimes, jokingly, pledges to reassign IRS agents to the border -- has proposed a 16 percent "business flat tax" as a replacement for the corporate income tax and the payroll tax. That part of Cruz's agenda has hidden in plain sight on his campaign page; it has drawn occasional fire from the Wall Street Journal, and from journalists like Vox's Matthew Yglesias.
"What Cruz wants to say is that it's really a 16 percent tax, since 19 cents (the tax) is 16 percent of the $1.19 total price paid," Yglesias wrote last month. "This is how some European governments characterize their tax system, because it makes high European taxes sound relatively low. It's a bit ironic to see an extremely American politician pulling out this trick, but this is still the United States of America, and Cruz is talking about a 19 percent tax."
On Thursday, Rubio attacked the "business flat tax" as a regressive hit on seniors, repeatedly quoting Ronald Reagan -- who signed the last fundamental tax reform in American history, and therefore nixed a number of ideas -- to judge it as toxic.
"Ronald Reagan opposed the value added tax because he said it was a way to blindfold the people, so the true cost of government was not there there for them," Rubio said. "When I am president of the United States, I'm going to side with Ronald Reagan on this and not Nancy Pelosi and we are not having a VAT tax."
Cruz hit back immediately. "A VAT is imposed as a sales tax when you buy a good," he said. "This is a business flat tax. It is imposed on business and a critical piece that Marco seems to be missing is that this 16 percent business flat tax enables us to eliminate the corporate income tax. It goes away. It enables us to eliminate the death tax."
In some conservative media, that argument has found takers. Arthur Laffer and Stephen Moore, two supply-siders who are often called on by Republicans to validate their tax plans, have defended Cruz's "business added flat tax" on the grounds that it would replace, not supplement, the corporate income tax.
It was a real debate -- though not one particularly welcome at the town hall. The Conservative Leadership Project, the PAC that had invited Cruz (as part of a series of candidate interviews with state Attorney General Alan Wilson), asked reporters in vain to identify where the Rubio fliers had come from.