Marco Rubio has advocated cutting taxes as a candidate for U.S. Senate in Florida, and his campaign continued down that path Tuesday, revealing “23 Simple Ways To Create Jobs, Grow Our Economy And Help The Gulf Coast Recover.” Thirteen of those ideas are tax cuts or opposition to future unannounced tax cuts. However, there is little evidence that cutting taxes would significantly stimulate the economy, and it would — in contrast to Rubio’s stated position — increase the debt.
Specifically, he supports making permanent many of the Bush tax cuts that expire in December 2010. As economist Mark Zandi, an adviser to John McCain’s presidential campaign, estimated, for every dollar of the Bush tax cuts, only around 30 cents of economic activity is created. Other Rubio solutions, such as cutting corporate taxes, extending the Alternative Minimum Tax patch and making dividend tax cuts permanent, all generate about 30 to 50 cents per dollar of economic activity per dollar spent.
Rubio also supports permanently doing away with the estate tax (or as he calls it the “death tax”), which does not apply to 99.7 percent of estates according to the Brookings Institution and, for 2009, only applied to estates worth more than $3.5 million, or $7 million for married couples. Some of his other solutions are cutting sales and property taxes, but the U.S. Senate does not have the power to do that. The Florida legislature does.
Rubio also opposes deficit spending as a U.S. senator. “In the U.S. Senate, I will support measures like a balanced budget amendment and the line-item veto that will help control the excessive and wasteful spending in Washington that threatens to leave future generations with crushing debt and a country worse off than that of their parents and grandparents,” he wrote on his campaign website.
On April 15, he said, “This high debt load is going to lead to higher interest rates and higher taxes.” Noting Rubio’s new economic proposals offered at a town hall meeting on Tuesday, a Rubio press release claims, “America is the greatest country in the world, but Washington has been taken over by big-spending politicians from both parties who will say or do anything to get elected. Marco is the only candidate who will challenge the direction they’re taking our country.”
These policies would indeed “change the direction” of the fiscal situation in the country, creating less revenue for the government and higher debt. Extending these tax cuts would add $3.4 trillion to the deficit, according to CBO projections and the nonpartisan Center for Budget and Policy Priorities.
Rubio’s platform puts him in line with Senate Republican leadership. Brian Beutler of TPMDC reported on Monday that Sen. Mitch McConnell said at a press conference defending Senate Minority Whip John Kyl’s support for tax cuts, “There’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy. So I think what Sen. Kyl was expressing was the view of virtually every Republican on that subject.”
Rubio may be positioning himself for the center of the mainstream of the Republican Party, but the public may not be going along. The Peter G. Peterson Foundation hosted meetings in 19 cities to educate the public about the deficit and the unsustainability of future spending. The most popular solutions to the deficit and debt were not more tax cuts, they were higher taxes on the top 5 percent, an energy tax and a tax on securities — all measures that Rubio says would hurt the economy.
