This is ridiculous. Marco Rubio says that percentage-wise his tax plan is more favorable to the poor than the rich, and both left and right-leaning tax groups agree. But—this is only because Rubio’s plan includes a new $2,000 fully refundable personal tax credit. For those of you not in the know, “refundable” means you get it even if you don’t owe any taxes. So if you’re poor, and your tax bill is already zero, you get a check for $2,000 from Uncle Sam. For someone making minimum wage, that’s a big chunk of money, and on a percentage basis it means that Rubio’s plan is pretty generous.
But is this really Rubio’s plan? After last week’s debate, a Rubio spokesman told Vox, “Rules would be tailored to ensure that our reforms would not create payments for new, non-working filers.” So….maybe the credit isn’t fully refundable? Perhaps Rubio will update his plan to explain. Well, he did update his plan, and here’s what it now says:
Creates a new $2,000 (individual) / $4,000 (married filing jointly) refundable personal tax credit in place of the standard deduction: Credit phases out beginning above $150,000 (individual) / $300,000 (married filing jointly) and would be unavailable to taxpayers with an annual income in excess of $200,000 (individual) / $400,000 (married filing jointly).
So Rubio took the time to specifically say that his tax credit would phase out at high levels, which makes almost no difference to anyone. But his update continues to say, without qualification, that his tax credit is refundable. This means that everyone gets a $2,000 check regardless of their tax bill.
Look: if you want to go the Ben Carson route and just vaguely say that you’re in favor of a 10 or 15 percent flat tax, and don’t worry your pretty heads about whether the math works, then fine. But if you offer up a very detailed plan, then you’re responsible for the details. Rubio’s plan says he’s going to offer a $2,000 refundable tax credit to everyone. He was challenged on this, and in an update he still says he’s going to offer a $2,000 refundable tax credit to everyone.
It’s time for Rubio to knock off the games. If the refundable credit is really available to everyone, he needs to say so. If it’s not, then his plan isn’t very generous to the poor, and he needs to stop quoting analyses that assume the credit exists. He can’t have it both ways. Which is it, Marco?