The Corner

Harwood vs. Rubio on Taxes

I’m copying the transcript of the debate exchange from the Weekly Standard’s Mark Hemingway:

HARWOOD: Senator Rubio, 30 seconds to you.

The Tax Foundation, which was alluded to earlier, scored your tax plan and concluded that you give nearly twice as much of a gain in after-tax income to the top 1 percent as to people in the middle of the income scale.

Since you’re the champion of Americans living paycheck-to- paycheck, don’t you have that backward?

RUBIO: No, that’s — you’re wrong. In fact, the largest after- tax gains is for the people at the lower end of the tax spectrum under my plan. And there’s a bunch of things my tax plan does to help them.

Number one, you have people in this country that…

HARWOOD: The Tax Foundation — just to be clear, they said the…

(CROSSTALK)

RUBIO: …you wrote a story on it, and you had to go back and correct it.

HARWOOD: No, I did not.

RUBIO: You did. No, you did.

Here’s the Tax Foundation paper to which Harwood was referring. (See Table 3 and Chart 4.) Tax Foundation president Scott Hodge says that Rubio was right: poor people get a larger percentage increase in after-tax income under his plan than people in the top 1 percent.

A few thoughts: 1) Rubio seems to have been referring to a tweet that Harwood got wrong and had to correct (it’s in the Hemingway link). 2) Rubio’s statement is right, as Hodge says. 3) Harwood is also right to say that the top 1 percent sees a bigger gain than people in the middle of the income spectrum. 4) The Tax Foundation analysis is outdated, since Rubio has revised his plan since it came out. My guess is that it will show the middle class getting a higher share of the plan’s tax cuts.

Update: Here’s a bit more of the exchange, from Time’s transcript. Picking up where we left off:

(CROSSTALK)

HARWOOD: Senator, the Tax Foundation said after-tax income for the top 1 percent under your plan would go up 27.9 percent.

RUBIO: Well, you’re talking about — yeah.

HARWOOD: And people in the middle of the income spectrum, about 15 percent.

RUBIO: Yeah, but that — because the math is, if you — 5 percent of a million is a lot more than 5 percent of a thousand. So yeah, someone who makes more money…

HARWOOD: (inaudible)

RUBIO: …numerically, it’s gonna be higher. But the greatest gains, percentage-wise, for people, are gonna be at the lower end of our plan, and here’s why: because in addition to a general personal exemption, we are increasing the per-child tax credit for working families.

Again, Harwood is pointing out that the top 1 percent would see a bigger percentage gain than people in the middle of the income spectrum and Rubio is pointing out that the poorest people would see larger increases than either. Both of them are right. (Rubio is wrong, however, to suggest that these percentage increases are affected by the fact that 5 percent of a million is a lot more than 5 percent of a thousand. That would be a good point if Harwood had compared the dollar amounts different income groups would get from Rubio’s tax plan. But if Harwood had made that kind of comparison, it would have shown the top 1 percent getting a lot more than twice what middle-income people get.)

Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.

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