Presidential candidate Marco Rubio doesn't want voters to think he's just another Republican promising huge tax breaks for the wealthy.
But that's what he is, and a new analysis proves it.
Rubio’s plan came under scrutiny during CNBC’s Republican primary debate last week, when the Florida senator got into a testy exchange with moderator John Harwood. When asked whom the tax cut would help most, Rubio boasted that "the largest after-tax gains is for the people at the lower end of the tax spectrum."
The basis for Rubio’s statement was an analysis by the Tax Foundation, an independent but conservative-leaning organization that had examined an earlier version of the tax cut he is now touting on the campaign trail. And he was telling the truth about what that analysis showed.
By the Tax Foundation’s reckoning, the poorest 10 percent of Americans would get the largest after-tax gains, followed by the richest 1 percent and then everybody else. The main reason the very poor do so well in this analysis is that Rubio's tax plan includes a refundable credit that's available even to people who are so poor they don’t owe income taxes. That's a feature of Rubio's plan that, if enacted, many liberals would actually celebrate.
But the Tax Foundation findings focused on percentage increases in income -- in other words, how the size of the each person’s tax break would compare to what that person already makes. As journalist Dylan Matthews has written, relying on that standard alone produces a very incomplete picture. In sheer dollars, the average tax break for the richest 1 percent of Americans turns out to be more than 100 times larger than the average tax break for the poorest 20 percent. (To see what this looks like, click over to Matthews' article at Vox.)
The figure Rubio cited obscures something else -- what his tax cut would mean for the overall distribution of taxpayer resources. Here's where a new analysis from an independent but liberal-leaning group called Citizens for Tax Justice comes in handy.
Estimates have suggested that Rubio’s tax cut would increase deficits by anywhere from $4 trillion to $12 trillion over 10 years, depending on how you count. Either way, it’d be a staggering amount of money -- so staggering that even prominent conservatives have blanched at the price tag. But according to the CTJ analysis, the poorest one-fifth of the country would keep just 6 percent of the money while the bottom 60 percent, as a whole, would get just 22 percent. By contrast, the richest 5 percent of Americans would pocket nearly half of the tax cut while the richest 1 percent alone would receive more than one-third.
Huffington Post infographic by Alissa Scheller
Keep in mind that, in the real world, the poor’s share of the tax cut would probably be smaller than either the CTJ or Tax Foundation analysis suggests. That’s because Rubio campaign officials have said they would limit the refundable tax break to people who are working.
They haven't been overly specific about how they would do this, and Rubio himself hasn't said, making it difficult to know precisely what effect such rules would have. However, CTJ director Bob McIntyre told The Huffington Post, "if [Rubio] were to find a way to successfully limit the tax cut to exclude many low-income people, then the share of the tax cut for low-income people would go down significantly."
Whatever the details of the refundable credit, the bottom line is clear. If enacted, the bulk of the money in Rubio's tax cut would go to the affluent and a huge chunk would go to the very richest of the rich. Meanwhile, the loss of so much revenue would require some combination of higher deficits and deep cuts to government programs, most of which disproportionately benefit the poor and middle class.
Rubio may think that’s fine, because he thinks government programs are bloated and wasteful. He may think his tax scheme will create enough economic growth to offset whatever harm spending cuts do. Or he may think that taxpayers, particularly wealthy taxpayers, simply deserve to keep more of their money. Plenty of conservatives believe some or all of those things.
But that’s not the argument Rubio was trying to make in last week's debate. And there’s a reason for that: He wants to dispel the perception that his tax plan would primarily give money to the wealthy. Unfortunately for Rubio, that perception is accurate.