From the Monday Morning Jolt:
Marco Rubio’s Smooth Dexterity About His Agenda’s Downsides
There’s a lot to like about Rubio; he’s the best communicator in the GOP. But his plans do have details that some folks on the right might dislike. But the senator’s such a smooth, polished communicator that he can talk around the inconvenient drawbacks and unpopular points and leave audiences feeling good about everything he’s just said.
For example, he conceded that under the proposed Rubio-Lee tax plan, some people — he estimated about 10 percent — would face higher taxes, while reducing it for the rest.
For 2015, the top tax rate is 39.6 percent and kicks in for $413,200 for individuals, $464,850 for married couples.
Under Rubio’s plan, the top rate drops from 39 percent to 35 percent . . . but it kicks in at $75,000 for individuals, and $150,000 for married couples. There are a decent number of individuals making $75,000 and married couples making $150,000 who will be surprised to learn that they’re in the top tax bracket in the United States. Rubio points out that there are various little steps people can take to reduce their taxable income below that threshold — put money in a retirement account or health savings account, etc., and Rubio-Lee also includes a $2,500 per child tax credit, which will do a lot for the parents in that higher categories. (The other tax rate under Rubio-Lee? Fifteen percent. Right now, the 15 percent tax rate only applies to single filers making $9,225 to $37,450 and married couples making $18,450 to $74,900.)
If you’re a married couple with a combined taxable income of, say, $140,000, currently playing the 25 percent rate, the Rubio tax plan is terrific! Your rate is dropping to 15 percent! But if you’re a married couple with a combined taxable income of, say, $160,000, currently paying a 28 percent rate . . . Rubio-Lee’s 35 percent rate doesn’t look good at all! (UPDATE: See below)
On immigration, he would insist his views are nowhere near pro-amnesty . . . but under his preferred scenario, a decent number of people who entered the country illegally will be allowed to stay and not fear deportation. He says that his agenda would require a secure border, employers using E-Verify to ensure they’re not hiring illegal immigrants to do work, and a visa entry and exit system to ensure those who enter legally on temporary visas don’t stay longer than they’re permitted. Then those who are here illegally would register, pay a fine for violating immigration law, and face deportation only if they committed crimes. I pressed him on whether that would apply to both misdemeanors and felonies, and he indicated he wanted it “as strict as possible” — including DUIs. He expressed frustration with pro-immigration-“reform” groups (my scare quotes, not his) that believe those who are entered the country are owed the right to stay here, instead of being granted the privilege of remaining here by a United States that deems their stay in the country’s best interest.
You’re going to want to watch these:
2) Larry Kudlow interviews Senator Ben Sasse of Nebraska.
UPDATE: Ramesh writes in, saying that the married couple in my example above would be better off on their overall tax bill because even though they’re paying a higher rate on their income beyond $150,000, they’re paying a lower rate on the income below $150,000.
He calculates that couples would start seeing their tax rates go up at about $220,000 or so. (Right now a married couple making $151,200 to $230,450 is taxed at the 28 percent rate.) There’s a class of Americans sometimes referred to as “HENRYs” — “High Earners, Not Rich Yet” — who will make up most of that 10 percent and will pay more under the Rubio-Lee plan. Those folks might be a little irked that they’re the ones who pay more under a new plan, compared to those with much higher income levels; the married couple in the next neighborhood over with a combined taxable income of $465,000 would be enjoying the top rate dropping from 39.6 percent to 35 percent.
Elaborating a bit more, if the 10 percent who will pay more under Rubio-Lee is mostly married couples making, say, $220,000 to $465,000 and singles making $180,000 to $413,000, a lot of people will dismiss the complaints about higher taxes as whining from spoiled suburban yuppies.
But a married couple with each partner making a low-six-figure income in New York City, Washington, D.C., San Francisco, Los Angeles, Silicon Valley, most of Connecticut, etc. doesn’t feel particularly rich, and while I can’t stand the “balancing the budget on the backs of” cliché, people in this demographic are going to ask why the upwardly mobile and working are paying more compared to groups they perceive as super-wealthy — all under a plan that’s supposed to help people “live the American dream,” etc. These groups certainly don’t think of themselves as undertaxed, and you figure they pack more clout in terms of influence than some other demographics . . .