President Cruz: Taxes, Tips, School Choice and Child Investment Accounts

Photo: File:Internal Revenue Service Building.jpg by Wallstreethotrod at English Wikipedia, Wikimedia Commons, public domain.

01 The record and the scenario

Ted Cruz's tax record has a shape no other prospective candidate's does: he wrote provisions that are now the tax code. He introduced the No Tax on Tips Act in January 2025; the Senate passed it by unanimous consent in May; and its substance — a deduction of up to $25,000 in tips, available with the standard deduction, phasing out above $150,000 (single) or $300,000 (married) in income — was signed into law on July 4, 2025 inside the One Big Beautiful Bill Act. His separately filed Invest America Act was rebranded, with President Trump's personal endorsement Cruz says he lobbied for, into the Trump accounts: $1,000 federal seed deposits into index-invested accounts for every child born 2025-2028, about $3 billion a year.

That is the record. This article is not a prediction. This is scenario analysis, not a prediction or endorsement: as of September 18, 2026, AP describes Gavin Newsom and Kamala Harris as potential 2028 Democratic contenders and reports Republican discussion around JD Vance, Marco Rubio, Ron DeSantis and Ted Cruz; most figures profiled have not formally entered a presidential race. The scenario question for a Cruz presidency is unusual among these pieces in a second way: the first act is already law, and the man who drafted it knows precisely where its seams are. A Cruz first 100 days is a second act — the fight over what expires, what grows, and what he has said, out loud, the accounts are really for.

02 Day 1: executive orders

A Cruz day one on tax is mostly administration, and he would relish it: executive orders directing the Treasury to maximize taxpayer experience in the first tips-and-overtime filing seasons (the Treasury must publish the list of tip-eligible occupations; the withholding systems must be rebuilt so workers see the benefit per paycheck, not as a refund surprise); directing the IRS to implement Trump accounts with the employer-match architecture Cruz predicts ('a pretty inexpensive employee benefit... but the benefit over time is massive'); and freezing or redirecting any IRS enforcement funding that a President Cruz, who has fought the agency's expansion since the 2013 spending fights, would rather see moved to service.

The more aggressive day-one item is regulatory: the 2025 law's tips deduction is limited to occupations that 'customarily and regularly received tips' before 2025, and the Treasury's occupation list is where the fights live. A Cruz Treasury writing that list generously — and an IRS guidance package on Form 4137 reporting — is the difference between a deduction that works for salon workers, valets, and gig couriers and one that is an audit lottery. Day one sets the pen.

03 Days 2-30: agency changes

The agency story is Treasury and IRS staffing. Cruz's career-long IRS antagonism — from the 2013 government shutdown he helped force over the health law's IRS enforcement role to his opposition to the agency's funding expansion — meets an inconvenient reality: the 2025 law's provisions are administratively demanding. New deduction categories (tips, overtime, seniors, auto-loan interest), a new account program with millions of $1,000 seed deposits, and revised withholding tables all need a functioning revenue service. Watch the first month for the Cruz balance: service-and-implementation money up, enforcement-and-audit money down, and a taxpayer-experience rhetoric that echoes the Taxpayer First Act tradition.

The Trump-account machinery is the bigger build. Banks and brokers must offer the accounts; Treasury must run the seed-deposit pipeline for every eligible birth (2025-2028 cohorts, backloaded to retroactively cover children born since January 2025); and states with their own child-savings programs — Nevada, Rhode Island, Maine pioneered $50-$500 seed models — must be knitted in. Cruz's stated vision is employer matching on top, making the accounts 'ubiquitous, just like 401(k)s.' The first 30 days would measure whether the implementation rulemaking starts on that timeline.

04 The first budget

A Cruz first budget request would be organized around one date: January 1, 2029 — the day the temporary tier of the 2025 law begins to lapse. The ask writes itself from the statute's own architecture: make the tips and overtime deductions permanent (JCT already scored the tips version at $32 billion over ten years as a temporary measure; permanence multiplies it); extend or universalize Trump accounts beyond the 2028 birth cutoff, which is currently a hard statutory stop; and pair it with the spending-offset rhetoric that Cruz, a 2013 austerity veteran, would demand for fiscal-hawk credibility.

The honest tension in a Cruz budget: the 2025 law added an estimated $3.4 trillion to the deficit over ten years by CBO's scoring, and even sympathetic fiscal hawks like Rand Paul voted no over it. Cruz's own framing — 'in the overall scheme of the bill, it's a relatively small expenditure' — worked in 2025 because the accounts were $3 billion inside a $3.4 trillion package. As the headline item of a Cruz budget, the same accounts face the opposite math: small enough to afford, symbolically expensive to defend against the debt hawks he would need for anything else.

05 First legislation and what requires Congress

Tax legislation is Cruz's home field, and the procedural map is favorable: everything in his agenda is tax law, and tax law moves through reconciliation, which needs 51 votes, not 60. The first Cruz tax bill would bundle permanence for the tips and overtime deductions, Trump-account extension (past the 2028 birth cutoff), and likely a state-and-local cap adjustment for Texas's benefit — all in one reconciliation vehicle, exactly as the 2025 law bundled Cruz's items into someone else's.

What reconciliation cannot carry is the thing Cruz has said he actually wants. In May 2026 he told the Milken Institute that 'Trump accounts are Social Security personal accounts' — the 'dirty little secret' — and predicted that within five years Americans would want their payroll taxes redirected into personal investment accounts. That is not tax law; it is the Social Security statute, the third rail of American politics, a 60-vote proposition in the Senate that killed George W. Bush's version in 2005 with both chambers Republican. A Cruz first 100 days would test whether a president can do by rhetoric what Bush could not do by campaign: build a constituency for payroll-tax diversion before the trust fund's projected 2034 shortfall makes the argument urgent. His stated theory is that visible compounding accounts do the persuading — 'babies grow up' — and the first 100 days would open the accounts that make the argument for him.

06 The comparative question: what Cruz-style tax politics means for 2028

Within the Republican field, Cruz's distinguishable trait is that his tax politics has migrated from austerity to what he calls 'opportunity conservatism': the tips deduction and the child accounts are targeted, worker- and family-framed tax expenditures — a long way from the 2013 shutdown Cruz, and closer to the Hawley-Vance working-family wing than either would comfortably admit. Against Vance — the prospective rival whose tariff politics Cruz has openly attacked as a tax on consumers — the 2028 argument is legible: Vance's industrial-policy conservatism versus Cruz's free-trade, code-based version of the same working-family pitch. The tips, overtime, and account provisions are the shared ground; tariffs are the fault line.

Against the Democratic field the fight is over the same instruments: Democrats' expanded child tax credit is the direct competitor to Trump accounts as the family-policy tool of the era, and the 2028 argument will be whether family support flows as cash (CTC) or as capital (seeded investment accounts). Cruz's version has the compounding story and the asset-building theory; the Democratic version has the immediate cash-flow case. It is a genuinely open argument — and Cruz is the only prospective candidate who has already enacted his half of it.

07 What courts could constrain

Tax law is the branch of government Cruz's agenda is most at home in, and the courts' main tax role here is narrow: the Sixteenth Amendment gives Congress essentially unlimited income-tax power, so the deductions and accounts face no serious constitutional exposure. The real constraints on a Cruz tax presidency are procedural and political, not judicial — but two legal frontiers exist. First, the payroll-tax redirection he has predicted as the accounts' purpose would run into the Social Security statute's structure and the spending-clause doctrine; any proposal that diverts dedicated trust-fund revenue would face both a statutory wall and, at scale, constitutional questions about commandeering the trust fund's financing that the 2005 debate never got far enough to litigate.

Second, administration matters: the Treasury occupation list for the tips deduction, the Trump-account custodian rules, and the employer-match guidance are APA-rulemaking and subject to challenge as arbitrary or beyond statutory authority (Loper Bright removed Chevron deference, so courts now decide for themselves whether the occupation list matches the statute). The realistic 100-day forecast: the tax provisions sail, the implementation rules get litigated at the edges — salon workers and gig platforms first — and the constitutional fight Cruz has teased, over Social Security itself, stays exactly where it has been since 2005: behind a 60-vote wall that no first 100 days can move.