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RUBIO: We Need a Pro-Growth and Pro-Worker Tax Reform
Rubio: “We need to do something to help people because they are being left behind… No one fights for them because they don’t have a lobbyist and they don’t have a trade association and they don’t have a newspaper that editorializes for them. We need to fight for them too.”
Washington, D.C. – U.S. Senator Marco Rubio (R-FL) spoke on the Senate floor to push for an amendment he and Senator Lee (R-UT) introduced to the Senate tax bill that would give working American families a far larger share of tax relief than the existing bill currently does.
Yesterday, Rubio discussed this effort on The Ingraham Angle and pushed for it on the Senate floor with Senator Lee. On Tuesday, Rubio spoke on the Senate floor to outline the importance of making the child tax credit applicable to payroll taxes, which would significantly benefit hard-working American families.
Rubio’s speech can be watched here. A transcript of Rubio’s remarks is below.
U.S. Senator Marco Rubio
U.S. Senate Floor
November 30, 2017
RUBIO: I want to talk today about something different—and that is the child tax credit, because yesterday Senator Lee and I announced a plan that would expand it, make it fully refundable against payroll tax to help working families across this country. And it’s been the subject of pretty significant criticism from some, including—the senator from Vermont may be interested hearing this—including from The Wall Street Journal, who editorialized against it today. So I want to address some of those criticisms because I think many of them are just not valid. They’re all invalid. A couple are actually disrespectful to American workers.
Here’s the first one that’s not valid: that we already expanded the tax credit to $2,000 and that’s enough. Well it’s not enough and here’s why: because most families that make between $20,000 and $50,000, they don’t really benefit from that expansion. They don’t make a lot money so they don’t owe a lot in income tax which is what the additional expansion of the child tax credit applies against. And it only applies— since only a portion—since most of the $2,000 child credit only applies to income tax and their primary liability is payroll tax, they get nowhere near the $2,000 benefit. Now the cost of raising a child is not any cheaper for a family making $40,000 than it is for a family making $200,000. And I would argue the family making $40,000 needs to credit more than the family making $200,000. Yet somehow, we have a provision in which the family making more gets more for their children than the family making less. That makes no sense.
The second thing I heard today—I hadn’t heard this one before—is that this is actually a negative tax, that people aren’t just getting their taxes phased out, they’re actually getting money on top of it. Well that’s false because our plan is limited to your tax liability. You can’t get any more credit than what you pay in taxes. If you owe $1,200 in taxes, the most your credit can be is $1,200. It can’t be above and beyond your tax liability.
The third one I’ve heard from a number of people is that this is welfare. And this one isn’t just false. To call the child tax credit welfare is downright disrespectful to the American worker.
Who are the people that would benefit from this? Let me tell you who they are. Truck drivers making $36,000 a year. Welders making $39,000 a year. Construction workers making $43,000 a year. A firefighter making $48,000 a year. These are not freeloaders. This is not welfare. This is their money. These are people who are working, and they make too much to get welfare from the government, but they aren’t paid enough to afford many things in life. This would be, for example, about 8.5 million working families that make between $20,000 and $50,000, if this graph lines up, with an average cut of $800, which is not a lot of money but it’s $800 more than what they have now if we were to expand it in this way.
I alluded to the editorial board of the Wall Street Journal that I generally agree with on most topics. They have never liked this child tax credit debate or idea. And they claim that this provision is anti-work. That isn’t just false. It’s ridiculous. You can’t get the child credit if you’re not working. You can’t apply it against payroll tax unless you have payroll taxes off your paycheck. How can a tax credit that you can only get if you are working be anti-work? So that’s not just false. It’s ridiculous.
The fifth argument is about the corporate rate. Our current corporate rate is 35%. We propose to cut it to 22%. Somehow, unless it’s 20%, it’s going to be a catastrophe for the American economy. Well, that wasn’t the case just a few years ago.
I campaigned for president and for U.S. Senate on a 25% corporate tax rate, and everybody said that would lead to growth. In 2014, Americans for Tax Reform, the group led by Grover Norquist, called for a 25% rate, it said corporate income tax rate from 35% to 25% is badly needed, it moves the U.S. rate closer to the developed nation average and it would help with growth. The Senate Finance Committee, international tax bipartisan working group called for 25%. The Heritage Foundation in 2010 called for 25%. The National Association of Manufacturers in 2014 called for 25%. Speaker Ryan’s Path to Prosperity 2013 budget called for 25%. The Alliance for Competitive Taxation called for 25%.
And I’m saying 22%. So somehow—by the way, this argument ignores all the other things that are in place. Immediate expensing, repatriation, all sorts of other things—it’s not just the 13% tax cut or 15% cut. It’s all the other things that come with it. By the way, if there is a better way to pay for what we’re trying to do, we’re open for it.
That has been the gold standard for a significant period of time. It’s what I campaigned on, it’s the promise that I made, and I want it to be even lower than that, at 22 percent. But by the way, if there is a better way to pay for what I’m trying to do here, I’m open to that. None has been offered.
I want to make two more points of criticism. We already have too many people not paying income tax. This would create even more. In essence it narrows the base. Well first of all, to the extent this credit takes people off the tax rolls at all, it isn’t forever. It is until their children turn 17. The second argument that I actually agree with is this: what we’re doing here is going to make us more competitive in the world, and that is going to lead to economic growth. That is not going to create more jobs, it is going to create pay.
We’ve been told by the White House economists, by the Finance Committee, by multiple different experts that we can expect to see real wage growth, on average up to $4,000. If you are going to be raising wages, then you are going to have people graduating to higher brackets or into the income tax range. In essence what they’re saying is, the people that make this argument, is for purposes of economic growth and revenue, this is going to be dynamic and it’s going to grow the economy, and I agree with that. But for purposes of the child tax credit, a bunch of people are not going to get pay raises, are going to get stuck where they are today, and they will never pay income tax. It can’t be both, guys. It’s either one or the other. And I believe it’s growth. And I believe there are people making $50,000 now that one day may make $55,000 or $60,000 and continue to move up. And by the way, once their kids turn 17 the credit goes away.
The last argument that it’s not pro-growth, that it’s not stimulative, and I know economists struggle to quantify it. I believe it’s stimulative. You know what teaches me this? Not an economist or some book I read. Real life teaches me this. Here’s why. You make $50,000 or $40,000 a year and you get for example, $8,000 back in your taxes, you know what you’re going to do with that money? You’re not going to put it under your mattress, or in a coffee can and bury it in your backyard. You are going to spend that money. You’re going to buy your kids clothes, shoes, and Christmas gifts. You may even be able to spend an extra day on vacation. You’re going to spend it at the very businesses and into the very economy that we are trying to grow. People making $50,000 a year consume almost all of the money that they make, and they’re going to spend it on their children but they’re also going to spend it into the economy.
If you believe that leaving more money in the hands of businesses leads to growth, and I do, I also believe that leaving more money in the hands of families leads to economic activity and that’s a positive thing. And the reason why I’m so passionate about it, and I’ll close with this, Mr. President, is I think one of the things we’ve been missing for too long is the working men and women of this country that have been hurt badly by the economic restructuring that we are going through—automation, outsourcing and all sorts of changes in the American economy.
I think about my parents who worked in the service sector, and 30 years ago as a bartender and as a maid my parents were able to afford to own a home. You know for a fact that least in Miami, Florida, today a bartender and a maid will struggle to own a home, not to mention afford the things that people can afford or they need to afford living there.
We need to do something to help people because they are being left behind. This new economy is great for a lot of people with the right degrees and the right industry with the right skills, and we are leaving millions of people stuck and no one fights for them because they don’t have a lobbyist and they don’t have a trade association and they don’t have a newspaper that editorializes for them. We need to fight for them too. And leaving them a little bit more of their money that they earn by working is not too much to ask.
We need a pro-growth and a pro-worker tax reform, and that’s what we endeavor to do. And I hope I can get, when the time comes to offer that amendment, the support of as many of you as possible. This will not make life perfect. But for firefighters and construction workers, whatever little we can let them keep, more than what they have now, is going to make their lives and their children’s lives better than it is today. And ultimately isn’t that what we are here to do?