Uh oh: Rubio and Lee want a smaller corporate tax cut so they can pay for bigger child tax credits

I'm becoming more convinced by the day that Marco Rubio doesn't really understand economic growth as the primary driver of tax policy, nor does he understand how markets work in general. Where Mike Lee got lost down this same path I'm not sure, but the two of them are making last-minute trouble as we near a Senate vote on tax reform, and they're possibly endangering the new plan's ability to really spur growth. Why? Because they're playing class warfare politics in the apparently belief that individual are hurt when businesses are helped. We already have 48 Democrats in the Senate who labor under this illusion. They don't need any help. But Rubio and Lee want to cut corporate taxes less so they can write checks to people who don't even pay any income tax. How is that pro-growth? It's not. It's the sort of thing Barack Obama, Chuck Schumer or Nancy Pelosi would want to do.

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Someone spiked Rubio's and Lee's coffee with a concoction of socialist origins

You expect this sort of thing from Susan Collins or John McCain, but it appears someone spiked Rubio's and Lee's coffee with a concoction of socialist origins:

The idea of setting the corporate tax rate above 20% was emerging Wednesday as an option. Sens. Marco Rubio (R., Fla.) and Mike Lee (R., Utah), proposed a 22% tax rate to pay for expanding the child tax credit to more low-income families and tying the credit to inflation. Refundable tax credits go to households that don’t pay income taxes. It isn’t clear yet how much support they have among Republicans or if Democrats would help them change a bill they won’t ultimately support. Sen Bob Casey (D., Pa.) said he was unlikely to support that amendment, instead preferring a larger version backed by Democrats. “It’s not where we ultimately want to go,” said Sen. Sherrod Brown (D., Ohio). “I very much appreciate what Marco’s done on this…We can do something bipartisan on this and make this bill significantly better.” Any effort to set the corporate rate higher than 20% could run into resistance from the White House, where the insistence on a 20% rate has shaped the whole bill. Treasury Secretary Steven Mnuchin told The Wall Street Journal CEO Council gathering earlier this month that “it’s not going up” because “this is one of the things that the president feels very strongly about. Twenty perce

nt.”

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You don't cut the corporate tax rate to "benefit corporations." You do it to spur economic growth

Rubio has long been a fan of child tax credits, perhaps in the belief that they're "pro-family" or something. What they really are is a poor misdirection of capital that should be flowing in more productive directions. But the idea gets really bad when you're talking about refundable child tax credits, which mean that even if you didn't owe enough in income taxes to need the credit, no problem, the government will just cut you a check for the amount of the credit. That's a disincentive to work and earn, which is about as anti-growth as you can get. All this is bad enough, but what's even worse is wanting to skimp on the corporate tax cut to "pay for it." Cutting the corporate tax rate from 35 percent to 20 percent is a crucial and decisive move to put the U.S. on a more competitive footing to attract and maintain business capital. It is the single biggest action in more than a generation to spur corporate growth and profitability. Now, you could argue that cutting the rate from 35 percent to 22 percent is still a huge improvement. And you're right. It is. But where Rubio and Lee are missing the forest for the trees is in their apparent belief that tax reform needs to strike some sort of a balance between benefiting businesses and benefiting individuals, and that the balance shouldn't be too far on the side of businesses. This is simply economic malpractice. You don't cut the corporate tax rate to "benefit corporations." You do it to spur economic growth, which benefits everyone in the country. For most Republicans, especially those who advertise themselves as being of the conservative persuasion, this is market economics 101. If Rubio and Lee don't understand this, there's a place for people who think like they do. It's called the Democratic Party. I didn't think until now that either of them belonged there, but maybe some people who seem to have a solid understanding of policy are really just opportunitists who will take whatever position they think benefits them politically in the moment. I don't want to think that's true about either of these guys. Please, senators, prove me wrong.

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