Here’s Why Marco Rubio’s Tax Plan Is Bad for Everyone
Senator Marco Rubio (R-Fl.) has his eye on the 2016; on Monday, he told Fox News that he will announce on April 13 whether he will be “running for president or the U.S. Senate.”
In the meantime, he’s working with Republicans for a tax reform they can live with. Now, usually, this means a tax reform that the GOP can live with, but Obama won’t be able to — and therein lies the continual struggle of the last few years of politics in Washington D.C.. But this latest tax reform from Rubio departs from past attempts in that it does seek to appeal to both sides; it just isn’t fiscally responsible. Josh Barro of The New York Times calls it the “Puppies-and-Rainbows Tax Plan,” because it’s too good to be true, quoting James Pethokoukis, economic policy scholar with American Enterprise Institute. “It’s sort of the Oprah Winfrey theory of tax cuts. She was like ‘You get a car, you get a car.’ Well this is ‘You get a tax cut, you get a tax cut.'”
On other issues, such as immigration, Rubio has gone enough to the center to offend liberals and conservatives alike. “I think I’m the only one who gets heckled by both sides of the immigration debate,” said Rubio, according to the Miami Herald. Unfortunately, while middle ground is important for some issues, it means compromise, not all inclusive financial suicide. It’s not the first time that he’s taken a step to the side on an issue that his party might not agree with. But still, this has been a distinctly un-Republican plan from Rubio and his co-supporter Sen. Mike Lee (R-Utah), and according to a report from Brookings and Urban’s Tax Policy Center, the cost would be phenomenal.
“TPC estimates that the plan would reduce tax revenues by $2.4 trillion over the ten-year budget period,” stated the analysis, adding that it would cut out around 12 million tax units from federal income tax rolls for 2014. The plan also notes that while it would help “most households” to see reduction in taxes, 12% would see a rise, and wealthy married couples with kids would be the most advantaged group, all the while increasing the deficit because “base broadening is relatively modest” while “family tax credits are large.”
Brookings/Urban weren’t the only groups to find a concerning increase to the deficit. The Tax Foundation reports, according to Forbes, that 2016’s annual tax revenue would drop from a projected $474 billion to $414 billion, and in the short term, the deficit would double. If there’s one thing that Republicans have historically been very clear on, it’s how they feel about the deficit. It’s one of the party’s many strengths; the GOP’s fiscal conservatism, while sadly often partnered with enough social conservatism to make most women and gay couples cringe, helps to keep the nation financially balanced.
Social programs have a role, but creating a strong economic environment, and balancing the budget and our debt are all very important goals that Republicans often make priorities where Democrats may not. Rubio and Lee’s plan, in ways, arguably doesn’t make everyone happy at the cost of the deficit, it makes no one happy.
Republicans might be happy to see some cuts to businesses and corporate rates, the idea being that this trickles down, but that revenue drop is hardly likely to leave fellow members on the right looking happy. Democrats might be pleased with child tax credits, but there’s still that percentage who would be worse off, and the greatest advantages are not targeted toward the groups they argue need it most. If the tax reform made everyone happy, that would be bad compromise. If it made no one happy: bad compromise once again. Good compromise leaves both parties feeling 40% miserable, but with at least a 10% advantage on the side of feeling good, or like the policy works toward your party’s goals. Rubio’s plan misses that mark.
There is the suggestion that, if implemented, economic improvement would help to make up for the overall national loss in revenue, and according to the Tax Foundation, this might be true to an extent, with a projected 1.44% annual growth over the next decade, upping wages by 12.5% and investment by 49%, while also increasing jobs by 2.7 million. Unfortunately, all of that would be slow advantages to accrue, while monetary loss would be more immediate.
More from Politics Cheat Sheet:
- What Kind of President Would Marco Rubio Make?
- 5 Things That Can Stop You From Getting a Tax Refund
- How Is Obama’s Tax Reform Better for the Middle Class?
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