What Worries Conservatives About Marco Rubio’s New Tax Plan
The proposal would give parents a tax credit and cut corporate taxes—and appeal to potential 2016 voters—but some conservatives are concerned it could balloon the deficit.
This week, Sens. Marco Rubio and Mike Lee introduced a GOP tax reform plan that could serve as a preview of Rubio’s agenda if he makes a White House bid—but some conservatives already are skeptical.
For businesses, the plan would put the corporate tax rate at a single 25 percent rate and allow firms to deduct 100 percent of expenses, which the lawmakers say would account for the costs of capital investments the year they are made. Dividends and capital gains would not be taxed on the individual level, meaning any money made on many investments would not be subject to tax.
James Pethokoukis, a fellow at the conservative American Enterprise Institute, said while he is supportive of most of the plan, he thinks it could be difficult to sell to working families the idea that wealthy individuals would not have to pay individual capital gains taxes—even if it is more economically sound and the money still is taxed at the corporate level.
“A lot of people will see that as a throwback to the last campaign,” Pethokoukis said, offering this example: How would people react to hearing that someone like Mitt Romney doesn’t have to pay individual capital gains taxes?
He said because of the losses in revenue that would come from changes on both ends of the tax code, the proposal would need to be part of a larger plan to reduce the deficit—a plan that would include entitlement reform. “They need to explain how to pay for this or how it plays into entitlement economic reform,” he said. “They need to explain how all of these pieces work together.”
Rubio and Lee don’t say when their proposed changes would be implemented.
The plan would also create a new child tax credit worth up to $2,500 for every qualifying child, which Rubio and Lee say will provide relief for working families who pay payroll taxes and help raise the next generation of people who contribute payroll taxes.
Pethokoukis said he thinks the credit can be beneficial for working families who are still struggling. “What we’ve seen in the economy is the fruits of economic growth is not being evenly distributed,” he said. “You can’t have a strong economy with strong families. I think the other big part.”
The proposal could boost Rubio’s appeal to middle and low-income families should the senator make a run for the White House. Chris Bond, communications director for the reform-conservative-minded YG Network, said the plan’s child tax credit especially could get some voters to consider Rubio. “Where the GOP is lacked in recent election cycles is articulating exactly how our governing vision would make life better for middle-class families,” Bond said. “Things like the child tax credit allows them to keep more of what they earn.”
Rubio and Lee’s plan would split the individual tax rate into two brackets, with individuals making up to $75,000 and married couples making up to $150,000 taxed at 15 percent. Individuals and couples earning more than both totals would be taxed at 35 percent. In other words, people earning higher incomes would be taxed at greater rates than those earning lower incomes.
Changes in the tax code are hot on the minds of a few other 2016-minded Republicans. At last week’s Conservative Political Action Conference, Kentucky Sen. Rand Paul, said he would soon propose the largest tax cut in history. Like Rubio, Paul has proposed eliminating taxes on capital gains and dividends, as well as the estate tax. Meanwhile, Texas Sen. Ted Cruz hasproposed abolishing the Internal Revenue Service and moving to a flat tax.
Rubio and Lee’s plan differs from most Democratic proposals. Where the pair’s plan would eliminate the capital gains taxes on an individual level, the Obama administration hasproposed raising the capital gains rate to 28 percent. In addition, the White House’s tax proposal would increase the maximum child care tax credit to $3,000 per child for middle-class families.
Alan Viard, a resident scholar at the American Enterprise Institute, said Rubio and Lee’s plan works to straddle both ends of the conservative debate on taxes, with one side trying to enact business tax reform and the other side trying to expand the child tax credit.
Even the praises from conservatives are met with reservations that allowing business to deduct expenses and eliminate capital gains taxes alongside expanding the child tax credit would lead to a loss of revenue.
“We’re not going to effectively promote long-run growth with a plan that adds a large mount to the deficit,” Viard said.
In fact, Democrats have already started hitting back. After the plan was released Wednesday, Democratic National Committee Chairwoman Rep. Debbie Wasserman Schultz, who has been considered a potential candidate for Rubio’s Senate seat, released a statement criticizing Rubio’s proposals as more of the same old Republican ideas.
“Rubio’s tax plan shifts the burden onto working Americans and those hurting the most while propping up the very rich and offering tax breaks for corporations,” Schultz said, adding it would increase the deficit.
Found this one HERE.
Commerzbank nears a $1.4 billion settlement.
Germany’s second-largest lender agreed to pay various US regulators at least that figure to settle allegations it violated US sanctions against countries including Iran and Sudan. The deal could come as early as this month, and would also put to rest a separate money laundering case.
The Impact and Purpose of Net Neutrality
In theory, Democrats regulate because they believe that society progresses when the leadership elites make decisions for everyone — and correspondingly, Republicans oppose regulation because they generally believe that societies progress best when individuals are free to make their own choices.
In practice, Democrats regulate because it feels right and doing so attracts both financial and social support from the very rich, the socially established, and media they own; while Republicans oppose it because most are poor or middle class and recognize that regulation always reduces upward social and economic mobility.
About ten years ago it looked as if there might be a significant opportunity to use existing Hughes satellite technologies to provide high-speed, high-security networking support for western Canadian agribusiness. The numbers looked good: manageable entry costs, little technology risk, strong demand, and no significant competition. What I soon came to believe, however, is that while anyone could spend a couple of hundred bucks filing for the required licenses, for an industry outsider whose grandparents didn’t go to upper Canada College to achieve a 50:50 chance of getting and holding those licenses would probably cost in the range of three million in cash, two years of delay, and a couple of hundred thousand a year in compliance management.
That’s the net effect of the new regulatory framework now being hidden from view under the Orwellian “network neutrality” label — because an extra bit of paperwork is utterly meaningless to a national telecom provider with its compliance infrastructure already in place, but almost totally prevents industry disruption through outsider innovation.
Education didn’t come under significant federal regulation in the United States until President Carter created the Federal Department of Education in 1979. Between 1979 and 2011 the percentage of high school graduates who grade as functionally illiterate rose from about 4% to about 18%; most nonprofessional certifications offered by colleges and universities lost nearly all value; and, the Department of Education grew to control an estimated $141 billion in expenditures for 2014/15.
The microprocessor industries, ten years old and at the MC6502 (8 bit, 1Mhz) level in 1979, didn’t see significant federal oversight until the 2007/8 Pelosi budget took effect and the incoming Obama administration set about expanding the role of agencies like the FCC in the United States while transforming many industry standards and procedures from market-determined and voluntary to government-determined and mandatory through the internationalization of services previously performed by volunteers working within the American business and academic communities. During that period, however, the 1979 48K Apple II became the 8GB smart phone; high-speed internet and cellular services became worldwide phenomena; microprocessors improved by five orders of magnitude on cost and seven on performance; and the first commercial aircraft to be designed, built, and supported almost entirely through American-made hardware and software (the Boeing 757/67) flew a combined distance roughly equivalent to thirty round trips to the Kuiper belt.
So, as we all welcome Obama’s new Department of the Internet along with Google’s commitment to index only websites whose contents meet their standards for factuality, let’s all remember that what the microprocessor industries had in common with the Connecticut Yankee, apart from outrageous success on every widely accepted measure of social and economic contribution to mankind, was the nearly complete absence of regulation.
“If [Hillary does, as she claims, want] us to see her email, why did she create a secret account stored on a dark server registered at her home?
If she wants us to see her email, why didn’t she give State all of her email rather than censored fraction of the correspondence?
If she wants us to see her email, Clinton should turn over every word written on her dark account(s) for independent vetting. Let somebody the public trusts decide which emails are truly private and which ones belong to the public.” –Ron Fournier
Above from HERE.