Politics & Policy

Marco Rubio and Ivanka Trump Team Up on Tax Reform

Senator Marco Rubio (Reuters: Aaron P. Bernstein)
On his child-care initiatives, the president has a new ally in Congress.

The White House has gained a surprising new ally on issues related to tax reform: Senator Marco Rubio.

In an e-mail circulating through congressional offices, members of Congress have been invited to join Senator Rubio and First Daughter Ivanka Trump on Capitol Hill in the coming weeks for a discussion of “pro-family tax reform initiatives.” The private, bicameral event is the first time the two have ever collaborated and appears to be part of a broader push to build support for the Trump administration’s initiatives around child care.

The nascent collaboration was hinted at on June 6, when Senator Rubio praised Ivanka Trump on Twitter for advancing the issue of paid family leave. “In America, no family should be forced to put off having children due to economic insecurity,” Rubio tweeted, “@IvankaTrump is doing important work.”

Senator Rubio was responding to a previous tweet from Ivanka Trump occasioned by a joint American Enterprise Institute–Brookings Institution working group report outlining a consensus vision of how paid family leave might work in the United States. Despite conservative input limiting the duration of leave and requiring budget neutrality, speakers at an event unveiling the report widely acknowledged the difficulty of selling Republicans on the idea of a new federal program, much less one paid for in part with a payroll-tax increase.

This may be where Senator Rubio comes in. In 2015, he was the first Republican presidential candidate to come out in favor of paid family leave — though with a plan based on a targeted tax incentive for businesses that offered leave, as opposed to Ivanka Trump’s proposal to guarantee six weeks of family leave through the unemployment-insurance system (a much harder sell for conservative hardliners).

Sources familiar with the upcoming event suggest it will also be an opportunity for Rubio to discuss another of his favorite tax provisions: the Child Tax Credit (CTC). Along with Senator Mike Lee, Rubio has been a long-time advocate of expanding the CTC and making it refundable against payroll taxes — a change that, according to an analysis by the nonpartisan Tax Foundation, would significantly increase the progressivity of the tax system.

Here at National Review, Robert VerBruggen recently argued for a version of the CTC, paid out upon the birth of a child, as a conservative alternative to paid parental leave. As a cash payment, VerBruggen argues that it would preserve parental choice without adding new burdens to business — a policy priority Ivanka identified in a Wall Street Journal op-ed last year. “At the heart of this policy,” she wrote, “is the belief that every parent should have the freedom to make the best decisions for his or her family.”

The thinking of the White House has evolved significantly since the unveiling of Trump’s child-care plan last September

The thinking of the White House has evolved significantly since the unveiling of Trump’s child-care plan last September, and may still have room to evolve. The original plan, which would have let families deduct child-related expenses from their taxes up to the average cost of child care in each state, came under intense fire from both the left and the right for its large price tag — $500 billion over ten years — and because an estimated 70 percent of the subsidy would have been captured by families earning more than $100,000 a year.

In April, the Washington Post reported that the Trump administration was changing course, and had begun looking at bolstering the Child and Dependent Care Credit instead — an existing, partially refundable credit that helps pay for professional child-care services. In the past several weeks, Shahira Knight, the special assistant to the president for tax and retirement policy, met privately with child-advocacy groups and revealed that they were considering reforms to the CTC as well.

That could be a smart pivot for the White House if past reports are true that Trump considers his child-care agenda — whatever it ends up being — to be a nonnegotiable part of tax reform. An expanded CTC would likely face significantly less pressure from conservatives in Congress than a new child-care subsidy would, having been previously expanded in 2001 by the Bush administration and a Republican-controlled House.

Now, with Senator Rubio and Ivanka Trump preparing to speak to members of Congress directly, the president appears to have found a potential champion in a former electoral foe.

READ MORE:

Ivanka Trump’s Planned Parenthood Meeting

Paid Parental Leave: Working Women are Getting a Bad Deal

Marco Rubio’s Rex Tillerson Opposition is Fair

— Samuel Hammond is the poverty and welfare policy analyst for the Niskanen Center.

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