Right after Cruz defended his tax plan, Rubio was asked to defend his. Kimberley Strassel of the Wall Street Journal said, “Senator Rubio, you have the highest tax rates of anyone up on the stage, in terms of the top tax rates. 35%. Which some economists say would limit its potential to boost economic growth.”
Rubio did an excellent job of defending the child credit. But it’s worth dwelling, as he did not, on the oddity of the question. The top tax rate in Rubio’s plan would kick in at $300,000 for joint filers and $150,000 for single filers. The rate would be 35 percent, which is lower than today’s top rate of 43.4. (Nineteen percent lower, in fact.) By historical standards, that’s a low top rate: In the last 80 years, we have had a lower top rate in only 5 years. And in those years, we had higher taxes on capital than Rubio is proposing: He would abolish taxes on capital gains and dividends for new investments.
The Tax Foundation has scored the presidential candidates’ plans using the kind of supply-side assumptions that the Journal editorial page favors. According to the Foundation, Rubio’s plan would increase growth by more than the Bush, Cruz, or Trump plans, all of which feature lower top tax rates–which suggests that maybe minimizing the top tax rate on labor income is not the most important consideration in designing tax policy.
So: Rubio’s plan cuts the tax rate on high earners’ labor income by a lot, and to a historically low level. It eliminates taxes on their new investments. It promotes economic growth according to the usual logic the Wall Street Journal applies to tax plans. And still the question comes from one of its editors: Why don’t you cut taxes on the very highest earners even more?
I’m not saying that the Journal is wrong to want lower tax rates: I agree with it on that question. I do think that economic conservatives sometimes lack perspective on this question.