Evaluating the Lee-Rubio Tax Plan
The real flaws of the Lee-Rubio proposal are being obscured by misguided criticisms.
Of the top three candidates for the Republican presidential nomination, judging from the RealClearPolitics average of national polls, only one has released a detailed tax plan: Marco Rubio, the senator from Florida.
Not surprisingly, then, his proposal — made along with Senator Mike Lee of Utah, who proposed an earlier version of it on his own — has become the focus of the party’s tax debate.
When New Jersey governor Chris Christie, currently in eighth place in that average, outlined his own plan, the editors of the Wall Street Journal praised it by saying it was better than Rubio’s. Stephen Moore, writing in favor of a flat tax in The Weekly Standard, included an aside blasting the Rubio plan.
This could be a useful debate for conservatives — if it is conducted on accurate premises. Judging from the press coverage, so far it has not been. The real flaws of the Lee-Rubio proposal are being obscured by misguided criticisms.
The Los Angeles Times, for example, reports that Rubio is trying to alter “party orthodoxy” on taxes by moving away from cutting the top income-tax rate: “Rubio’s plan tests whether Republican primary voters are willing to go beyond that supply-side view.”
Politico claims that Rubio is “running on a tax plan that tosses out decades of GOP allegiance to the idea of simply slashing rates across the board and expecting faster economic growth to follow.”
Such descriptions may hurt Rubio by making him look out of step with his party, or help him by making him look fresh and new. But they are false. Republican tax policy has never been purely about supply-side tax-rate cuts to spur economic growth. Especially when it has been politically successful — when it has actually changed tax policy — the GOP has combined supply-side tax-rate cuts with tax relief that puts money in middle-class families’ pockets. Rubio’s plan is squarely within that tradition. Supply-side economics has often been criticized, unfairly, as a cover for plutocratic interests. That’s because a particular concern for the tax rate paid by the very highest earners is built into its logic. They pay the highest, and therefore the most distortionary, rate. They are the ones who are most responsive to changes in their incentives to work, save, and invest.
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Source: Evaluating the Lee-Rubio Tax Plan, by Ramesh Ponnuru, National Review
