On the heels of Senator Marco Rubio’s (R-FL) April 13th presidential announcement, critics have begun to scrutinize both Rubio’s and Jeb Bush’s records and plans to reform the tax code. While both are considered frontrunners to win the Republican nomination for the 2016 presidential race, they differ significantly on their tax policy positions. Even with the election over a year and a half away, tax reform will likely soon become a major campaign issue.
Bush, who has not yet formally announced his intention to run, has not revealed a potential federal tax plan. However, critics have pointed to initiatives during his tenure as Florida governor to shed light on his potential platform. Like his father and brother, Bush seems to favor cutting tax on investors. As governor, Bush repealed the .2% Florida tax on intangibles, which included stocks, bonds and accounts receivable. This cut was three times larger than the combined cuts in sales taxes, property taxes and the corporate tax. Democrats accused Bush of providing tax breaks to the wealthy while ignoring the middle and lower classes.
Bush’s investment tax cuts are likely to come under attack by not only Democrats, but other Republican nominees such as Rubio. On March 4, Rubio and Mike Lee (R-UT) announced their tax plan, which gained support from certain factions of both parties. The plan 1) consolidates all the seven individual tax brackets into two (15% and 35%); 2) creates an additional child tax credit of $2,500 while leaving the current $1,000 credit in place; 3) consolidates corporate taxes into a single 25% bracket; 4) shifts to a territorial tax system; 5) eliminates the double taxation of capital gains and dividend income; and 6) abolishes the estate tax.
The Rubio plan has been met with both support and resistance from both sides of the aisle. The Heritage Foundation called it “tremendously pro-growth,” while certain conservatives claim it is too liberal of a plan, specifically the $2,500 child tax credit portion. Most liberals on the other hand assert that the plan is too regressive, while acknowledging that it is far more practical than the Cruz plan, which seeks to impose a flat tax and eliminate the tax code entirely. With the 2016 race starting to gear up, it will be important to keep an eye on each candidate’s tax plans due to the increasing popularity of tax reform.
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