Recently, Sen. Marco Rubio gave an interview with ‘The Economist’ in which he gave some very strange criticisms (coming from a Republican at least) of the newly passed Tax Cuts and Jobs Act of 2017.
We’ve gotten used to hearing doom and gloom from the lips of Nancy Pelosi and Chuck Schumer. Grand predictions of financial calamity, higher taxes for the middle class, lack of positive impact, and corporations simply hogging the money have all been mainstay accusations against the law.
In reality, very few, if any of those predictions have played out.
That’s why it was so odd to see Sen. Rubio parroting criticisms of tax reform that you’d expect to see from a liberal Democrat appearing on MSNBC, not someone who’s typically carried themselves as a free market conservative.
I laid out some of his most highlighted comments in my original article on this several days ago.
Regardless, if it were just this first quote, you could explain Rubio’s comments away as him having more nuance than can be expressed in a few sentences.
Then he goes full Pelosi…
“There is still a lot of thinking on the right that if big corporations are happy, they’re going to take the money they’re saving and reinvest it in American workers,” he says. “In fact they bought back shares, a few gave out bonuses; there’s no evidence whatsoever that the money’s been massively poured back into the American worker.”
I had to double check this three time to make sure it was actually attributed to Rubio.
This is the kind of rhetoric we’ve heard over and over from Democrats in opposition of tax reform. The comment about buying shares back is something Elizabeth Warren routinely says.
I went on to point out that despite Rubio sounding a very liberal note on tax reform, his detractors remained his detractors (shocking, I know), as ‘The Economist’ took his interview and used it to question his political fortitude. Jennifer Rubin attacked him in an Op-Ed and of course twitter was ablaze with snarky comments about Rubio voting for the bill he’s now criticizing.
Here’s former Obama Bro. Seth Hanlon…
Given all of the pressure from both sides, Rubio has now sought to add further context to his original interview.
On the whole, the tax cut bill helps workers. It’s just not massive tax cuts to multinational corporations that do it,” Rubio wrote in an op-ed for National Review published Wednesday.
“Overall, the Republican tax-cut bill has been good for Americans. That is why I voted for it,” he added. “But it could have been even better for American workers and their families.”
After clarifying that he wasn’t speaking in total opposition to the tax bill, Rubio continues in his Op-Ed at National Review with a justification for his views.
This concern is especially valid given the realities of the 21st century. Big companies today aren’t what they were in the old economy. The cash windfall of a corporate tax cut can drive investment in multinational corporations’ foreign supply chains just as easily as it can to go to American factories and warehouses. And stock buybacks, by increasing the share value of foreign shareholders and driving new investment to its most productive use regardless of where or what that use might be, isn’t guaranteed to go fully to Americans’ paychecks. When this happens, it can encourage arbitrage, not American productivity…
…An updated framework for supply-side tax cuts would apply President Ronald Reagan’s great aphorism: Trust, but verify. We need an internationally competitive corporate tax rate, but the gains from corporate tax cuts should be geared to benefit Americans as much as possible.
While this is all well and good, it still leaves the Senator trying to straddle an odd middle ground.
It’s not really a conservative position to say that companies should only get to keep more of their own money if they will spend it exactly as the government wants. Yet, that’s essentially the argument Rubio is making.
Furthermore, in an age of multi-national corporations, when stocks values go up for foreign shareholders, they are also going up for American shareholders. That benefits millions of Americans who have various wall street investments in their retirement portfolios.
Targeting corporate tax cuts at new investment in the United States, instead of mere stock-market presence, would be a better guarantee for high-growth American companies and their workers. A territorial tax system that limits the ability of multinationals to arbitrage in low-tax foreign countries would be a better guarantee for reducing the American trade deficit.
He doesn’t expound on that idea further so we are left to wonder exactly what he envisions. All of this is very populist sounding. Whether that’s good or bad is up to each person to decide.
Buzzwords like globalization and him framing tax cuts as money that’s not originally belonging to the tax payer (but rather that it’s a gift from the government with strings) is a fairly abrupt shift from where Sen. Rubio has stood in the past.
His complaints about the child tax credit and lack of impact for the poor also stand in opposition to traditional conservative ideology.
There is no doubt the poor already heavily benefit from our progressive tax system but a tax cut is going to benefit those who pay the most taxes. That’s not a difficult concept. That means the person making $100k a year will see a much bigger impact than the person who pays $500 a year in income taxes after deductions.
It’s not that tax reform purposely left out the poorer among us. It’s that they weren’t paying income taxes in the first place so there’s nothing to cut.
I understand the tax bill wasn’t perfect. Not all the money given back is going to help the average American worker. Some of it will be spent in ways that we’d all prefer it not be spent. The question that I don’t think Rubio adequately answers is how exactly he’d change that. High altitude, general views like he states in his Op-Ed are not down and dirty policy prescriptions.
Where Marco Rubio is headed with this or what it necessarily means for his future, I’m not sure. Is he making a complete shift toward a more populist appeal? In many ways, he sounds a lot like President Trump here. The (political) problem is that neither side is very apt to give him positive reviews for his shift.
I do appreciate Rubio’s further clarification of his interview comments but in the short term he probably should of chosen his words more carefully, as he’s handed the Democrats a golden plated talking point heading into the 2018 elections.