Has Marco Rubio Finally Created a Tax Cut So Huge Republicans Don’t Like It?

Marco Rubio’s presidential campaign is running into an unusual problem without precedent in the post-Reagan era: His tax cut is too big. The trouble is not so much that his tax cut is substantively too big — within the context of a Republican primary, a “too-large tax cut” does not even make linguistic sense; it would be like saying “Reagan is un-good.” Rubio’s slightly different problem is that his tax cut is so gargantuan that nobody in the party actually believes it.

The context for Rubio’s plan is a debate within the Republican Party over the party’s agenda. For more than 25 years, the party has been organized around the central goal of reducing taxes paid by the rich. In recent years, a small group of conservative intellectuals have questioned that goal, both on substantive grounds (lower taxes for the rich have less economic payoff today than they did when the top tax rate was 70 percent) and on political grounds (the GOP’s attachment to cutting taxes for the rich has become a major political liability).

Those dissidents, called reform conservatives, or reformicons, or reformocons, have broached the subject gingerly. They are playing an inside game, trying to work their way into the party’s inner circle without offending the existing power structure. Their plans have mostly taken the form of suggesting that Republicans add tax credits for middle-class families to their traditional plans to cut taxes for the rich.

Faced with a debate between a faction that really wants to cut taxes for the rich and a faction that really wants to cut taxes for middle-class families, an obvious solution beckons: do both! Rubio’s first stab at pleasing both factions came last year, when he proposed what he called a “tax reform,” but which turned out upon inspection to be a traditional tax cut. In its basic design, Rubio’s original proposal was basically a replay of George W. Bush’s tax cut. It would have drained about two and a half trillion dollars from the Treasury over a decade (roughly similar to Bush’s tax cut) and with a somewhat regressive tilt to the payout. The lowest-earning fifth of taxpayers would have saved, on average, $79 a year, or 0.5 percent of their income. Taxpayers in the middle fifth would have saved about $1,100 a year, or 2 percent of their income. And the highest earning one percent would have saved $40,000 a year, or 2.8 percent of their income.

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