Sen. Marco Rubio (R-FL), a GOP 2016 presidential candidate, joined Sen. Mike Lee (R-UT) to discuss their new tax reform plan at The Heritage Foundation, which they recently released.
Lee began by saying the proposed tax plan is “pro growth and pro families,” explaining that the current tax code is very complex and tends to punish investment, hard work, marriage, and the ability to raise a family.
Lee said that his plan takes a seven-rate tax system and puts it into two rates – which isn’t easy to do – but is designed to simplify the tax system.
Under the framework, generally 80 percent of Americans would pay roughly a 15 percent tax rate, and all others would pay at a marginal rate of 35 percent. The higher rate would begin for an individual at $75,000, but doubles for married couples filing jointly.
The plan would decrease marginal tax rates, permit deducting capital expenses, eliminate double taxation on corporate income, make interest non taxable and move toward a territorial taxing system.
Rubio said this proposal is a starting point for a plan, but the hope is to come to an updated tax system for America.
He said America is engaged in a global competition with other countries for ideas and innovation, adding that America needs to be the best place to invest. Rubio blames debt and the growing number of government regulations as making America less competitive.
“We have a tax code, for example, that has the highest combined corporate tax rate on the planet,” said Rubio, adding that must be changed to get more investment into America.
Rubio touted that America needs the economy to be dynamic and vibrant. He said this pro-growth tax goal would encourage investment with the idea that the more one invests, the lower a tax rate should be.
“We have a very serious debt problem in America. It is one we cannot solely tax our way out of,” Rubio explained.
He said, “You have to grow your economy, so that your economy is larger than the share of debt that represents it,” adding that reducing spending also should help the debt problem.
Rubio blamed Medicare and Social Security for driving up the national debt. He explained that these two programs as designed bankrupt themselves and must be reformed to sustain the programs for future generations.
According to The Heritage Foundation, the business tax reform could improve economic growth dramatically and also help real incomes of all Americans.