The Rubio-Schumer Amendment Florida’s Republican tries to blow up the Senate tax reform.
https://www.wsj.com/articles/the-rubio-schumer-amendment-1511998489?mod=nwsrl_review_outlook_u_s_&cx_refModule=nwsrl#cx_testId=16&cx_testVariant=ctrl&cx_artPos=7
“Mr. Rubio may be setting himself up to run as a social conservative hero in 2024, or even 2020 if President Trump declines to run, and the child credit obsession is a down payment on that brand. Yet voters looking for a candidate who understands what makes America—and American families—prosper will have to look elsewhere.”
The GOP is pushing forward on tax reform, though a receiving line of Republican holdouts are slow-rolling progress. One who deserves special mention is Marco Rubio, who contributed nothing to ObamaCare repeal and now aspires to dilute the tax bill. Voters ought to remember this when he’s next pitching himself for President.
On Wednesday Mr. Rubio and his political sidecar, Mike Lee of Utah, announced that they’ll file an amendment to the tax bill to change the $2,000 child tax credit. They want to make the credit refundable up to a person’s payroll tax liability, among other expensive tweaks. To pay for the changes, Messrs. Rubio and Lee would increase the corporate tax rate to 22% from the bill’s 20%.
If Mr. Rubio thinks payroll taxes are too high, he can propose a payroll tax cut. But then he’d have to weather the political fight of going after funding for Medicare and Social Security. So instead his back-door plan is to expand a refundable credit, which delivers checks to folks who owe no federal income tax. This is a disincentive to work and we would have thought antithetical to conservative principles.
More destructive is his increase in the corporate tax rate, which is the most pro-growth plank in the bill and could significantly increase what Americans earn since much of the tax falls on labor. A point or two more may seem like no big deal but it might be the difference between making the U.S. more competitive than the OECD’s roughly 24% average—or not. And that’s a mere average. One competitor for investment is Ireland’s 12.5% rate.
Mr. Rubio knows this, or ought to, yet his press release could have been written by Democratic leader Chuck Schumer. “Right now, 70 percent of the tax cuts we’re considering would go to businesses,” the Rubio-Lee dispatch says, “and only 30 percent to individuals.” This is a false choice—individuals earn income at businesses—and apes the left’s class-war politics.
Senate tax writers have already indulged the Rubio-Lee caucus beyond what any two Senators deserve. The original proposal increased the credit to $1,650 from the current $1,000. The pair demanded more. So when Republicans received a revenue windfall from repealing the ObamaCare coverage mandate, they raised the credit to $2,000. Now that also isn’t enough. Senators who demand ransom should at least stay bought.
Messrs. Rubio and Lee are inviting Democrats to join them to pass the amendment on the Senate floor, though Democrats will oppose the final bill. Republicans will have to hang together to defeat Rubio-Lee, which creates a tough vote for incumbents running in 2018. This could also pick a fight with the White House, which has laid down a marker on the 20% corporate rate.
Mr. Rubio may be setting himself up to run as a social conservative hero in 2024, or even 2020 if President Trump declines to run, and the child credit obsession is a down payment on that brand. Yet voters looking for a candidate who understands what makes America—and American families—prosper will have to look elsewhere.
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