Rubio: Tax law is positive but could have done even more to help workers

Rubio: Tax law is positive but could have done even more to help workers
© Greg Nash

Sen. Marco RubioMarco Antonio RubioJudd Gregg: Two ideas whose time has not come Nikki Haley: New York Times ‘knew the facts’ about curtains and still released story March For Our Lives founder leaves group, says he regrets trying to 'embarrass' Rubio MORE (R-Fla.) on Wednesday elaborated on his thoughts about the GOP tax law, after comments he made about the corporate tax cut frustrated some conservatives.

Rubio, who voted for the tax law in December, recently told The Economist that there's "no evidence" that the corporate tax cut has massively benefited workers. The remarks disappointed some on the right who have been touting the law's benefits ahead of the midterm elections and excited Democrats who have been railing against the measure.

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In an op-ed for the National Review published Wednesday, Rubio said the GOP tax law helps Americans but could have been even more beneficial for working families.

"An updated framework for supply-side tax cuts would apply President Ronald Reagan’s great aphorism: Trust, but verify," he wrote for the right-leaning news outlet. "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."

A top priority for many Republicans during the tax debate was to get the corporate rate as low as possible. In the final bill, the rate was cut from 35 percent to 21 percent.

But Rubio said that the bill could have put "less focus on cutting the statutory corporate tax rate, but been at least equally focused on investment, wages, and the American worker."

As an example, he cites the fact that a low corporate rate was prioritized over full expensing — the ability for businesses to immediately write off the full costs of their capital investments. The law only includes full expensing for five years, while the corporate rate cut is permanent.

"Full expensing is a tax cut for businesses planning to make new investments in the United States, while a corporate income-tax rate cut is an across-the-board windfall for capital, no matter its use," Rubio wrote. "By allowing businesses to deduct their capital investments, full expensing better increases the value of investments that are tied to American labor, while a corporate income-tax rate cut increases the return to capital regardless of its country of origin or whether it will create American jobs."

He also said that his proposal with Sen. Mike LeeMichael (Mike) Shumway LeeThis week: Kavanaugh nomination thrown into further chaos Ex-college classmate accuses Kavanaugh of sexual misconduct Kavanaugh accuser agrees to testify next week MORE (R-Utah) to expand the child tax credit would have made the tax law more focused on boosting families' incomes. The tax law expands the credit, but not by as much as the two senators had sought.

"Putting a little bit less priority on a blank-check corporate tax-rate cut, in order to increase the purchasing power and stability of working-class families by increasing the child tax credit, would have been a better guarantee for American families, as I said during the tax bill’s debate," Rubio wrote in the National Review.

Rubio said the economy has changed over the years, and companies can use the savings they get from a corporate tax cut on their overseas operations as easily as they can use it domestically. He also said  company stock buybacks may not necessarily boost productivity in the U.S.

"We in the conservative movement need to stop viewing big companies like they’re all General Motors in the 1950s," he wrote.