Rubio plans to make Mitt Romney part of that infamous ’47 percent’

RubioRomney

U.S. Sen. Marco Rubio, who will announce his candidacy for president later today, has already made it clear that his ambitious tax-reform proposal will be a centerpiece of his 2016 campaign.

How ambitious, you ask? Well, among other things, it would totally eliminate all taxes on unearned income. More specifically, the capital gains tax would be cut to zero. The tax on interest income would be eliminated. The tax on dividend incomes would be cut to zero. The estate tax would be cut to zero. All income generated by those means would become tax free.

Because of privacy laws, we could ordinarily only guess or speak in general terms about the impact that such changes might have on the tax liabilities of wealthier Americans. But as it happens, we have access to the tax returns of one such couple in the 2011 income tax return of Willard M. and Ann D. Romney. So let’s see what happens if we take the proposals in the Rubio plan, which the Florida senator developed in concert with U.S. Sen. Mike Lee of Utah, and apply them to the Romneys.

Back in 2011, the former GOP presidential nominee and his wife reported adjusted gross income of $13.7 million, and they paid $1.935 million in federal income taxes, producing an effective tax rate of just 14.1 percent. Looking deeper into the Romney’s return, we learn that almost of their income that year came in the form of taxable interest ($3 million), stock dividends ($3.65 million) and capital gains ($6.8 million).

Under the Rubio plan, none of those income sources would be taxable any longer. So after the Romneys deducted their mortgage interest and charitable contributions, their federal tax liability would fall to …. zero. Literally, zero.

On income of almost $14 million, they would pay no federal taxes. Not a single penny. Ironically, Mitt and Ann would fall into that “47 percent” that Romney himself condemned in the 2012 presidential campaign for living in this country and benefiting from its prosperity but paying no federal income taxes to help run and defend it.

But wait. It gets worse.

According to the latest IRS numbers, in 2012 the richest 400 taxpayers in the country** earned a total of $5.2 billion in taxable interest income. All of that money would become tax free under the Rubio-Lee plan. They also earned $21.7 billion in dividend income, which also becomes tax free. And they earned $76.3 billion in capital gains, also tax free under Rubio-Lee. That’s a total of $103 billion a year, collected by the richest 400 Americans, that would suddenly be completely free of federal taxation.

KA-CHING!

Now, if you eliminate taxes on all that unearned income, you obviously create a giant, gaping hole in federal revenue. According to an analysis by the Tax Policy Center, an earlier version of the Rubio-Lee tax plan announced back in in 2013 would increase the deficit by some $2.4 trillion over the next decade. The newest version, updated last month, is considerably more aggressive and would cost the treasury considerably more, although the TPC has yet to conduct a full-scale analysis of the new version.

Given the gargantuan scale of the tax redistribution proposed by Rubio, and given its emphasis on enriching those already quite wealthy, you might think that his plan must have been embraced enthusiastically by conservatives. If so, you would be wrong.

(And no, I am not kidding. For examples, see here and here.)

You see, as generous as it is to those already doing splendidly, the Rubio-Lee plan still isn’t generous enough in some minds. Conservatives love the fact that it eliminates taxes on unearned income, but they argue that the top tax rate on earned income is still too high under the plan. It calls for a top rate of 35 percent, down from the current 39.6 percent, and conservatives want that cut still further.

Rand Paul, by comparison, wins applause by eliminating all taxation of investment and interest income, just as Rubio does. But he proposes a single tax rate on earned income of just 17 percent on all taxpayers, rich and poor, which would significantly boost the tax benefits to wealthier Americans. (It would also slash federal revenue by $7 trillion over the next decade, and that’s by his own reckoning.)

And Ted Cruz, while decrying income inequality and the concentration of wealth, likewise calls for a flat tax of some unspecified percentage, the elimination of taxes on capital gains and dividends and, oh yeah, a cherry on top in the form of abolishing the IRS. He has not merely embraced the GOP tactic of using highly populist rhetoric to cloak policies favorable to the rich, he is taking the practice to new levels of audacity.

labor share

In short, if you think that the problems of America can be traced to the fact that its wealthiest citizens just aren’t wealthy enough, if you think that the greatest concentration of wealth in our nation’s history is a sign of health that ought to be encouraged through the tax system, if you think it’s a good thing that the share of our national output going to paychecks of working people is the smallest it has been in the 68 years in which we’ve measured such a thing, then boy do I have the political party for you.


** Income for the richest 400 taxpayers averaged $335.7 million in 2012.

Reader Comments 0

853 comments
Bill OrvisWhite
Bill OrvisWhite

The BEST solution to the runaway, gargantuan IRS is to simply ELIMINATE IT! I'm writing my check as we speak. My pals, they are a heartless, confiscatory organization which redistributes WE THE PEOPLE's (Tea Party Republicans/those with common sense) hard-earned dollar$! 


The FAIRTax is THE only way to correct our confusing, draconian tax code along with a Big Gov't agency which confiscates, bullies and DESTROYS LIVES to get what it wants. 


While I love the honorable Senator Rubio, His tax plan does not go far enough. We NEED TO adopt the FAIRTax, pure and simple. Now, at the end of the day, there could be a Bush/Rubio 2016 ticket WHICH ME AND MILLIONS WOULD SUPPORT IN A MINUTE, but at the moment, the honorable Senator  Rafael Edward "Ted" Cruz looks to be the ONLY REAL MAN WHO WILL FIGHT FOR THOSE WHO CARE ABOUT THIS ONCE-FREE NATION's FUTURE. As president, Senator Cruz WILL bring back a culture of life, low/no taxe$, eliminate ridiculous regulations on business and build a proper strong defense whereby the world once again respects The United States of America!


Amen,

Bill 

Wascatlady
Wascatlady

@Bill OrvisWhite Bill, move away.  Go to Somalia or Liberia--somewhere where they don't have that confistacory IRS!  Where you can keep all you earn!


Of course, there is no infrastructure to get your goods to market, no telecommunications, no educated workforce.  No police either, except that sworn to one leader or another.  You and your assets will be safe--until some boss takes a dislike to you because of your skin color or your religion or your personality--and then tosses you in a hell-hole prison or just kills you and takes your stuff.


Go ahead.  You will quickly learn how blessed you have been to live in this confiscatory country where you have the setting that allows you to accumulate assets. I give you a week.

Bulls_3y3
Bulls_3y3

@Wascatlady  is that the ONLY option kitty???  Obviously you support the pack of thieves in DC.  Maybe if you weened yourself off the DC soup line you'd understand Bill's blight.  

Bill OrvisWhite
Bill OrvisWhite

Thanks for playing Bill's Game of Common Sense @Wascatlady. Now, let Bill supply you with The Truth on this turn. Infrastructure and education can be better handled through something that is foreign to liberal McFlys like you. It is called The Private Sector! Okay, now that I settled those issues, let me set you straight on how much better our lives WILL BE when the IRS and the Department of Miseducation are abolished! All of us WILL be on The Road to Prosperity once those monies are freed up and put rightfully back into our pockets. Now, why in the world would you not want more of your own hard-earned dollar$ in your own pocket? Why do you wish to vote Democrat and have Big Gov't confiscate your earnings? And if you are a liberal receiving benefits, why would you want government cheese when you can have pride in earning your own dollar$? Please take your head out of the sand and stop voting for the failed Democrat party. Amen, Bill 

Bill OrvisWhite
Bill OrvisWhite

@Bulls_3y3 @Wascatlady The check I made out to the IRS was more than painful this time around. I still can't get away from them even though I sold my business to make life a bit more simple. It's sad that me and millions of others had to get out because of what this administration has done to us. In my whole life I have never seen an administration that has been so hostile to businessmen. I'm sick and tired of this useless progressivism that only hurts everyone in this once-free nation. This administration has no idea how it has choked off innovation and growth in the private sector. Amen, Bill 

Finn-McCool
Finn-McCool

"The reason most of us have seen little gain from economic growth over the last three decades is that the rich have rigged the rules to ensure that money flows upward. Through their control of trade policy, Federal Reserve Board policy, and other key levers of government, they have structured the market to weaken the bargaining power of ordinary workers and benefit the CEOs and Wall Street crew. As a result, the typical worker has seen almost none of the gains from economic growth over the last four decades. Most of this rigging comes in before-tax income."


http://www.smirkingchimp.com/thread/dean-baker/61779/bonanza-for-the-super-rich-the-fund-managers-tax-break

SimpleTruths
SimpleTruths

Good Morning America was fawning over Hillary Clinton this morning.  They even mentioned that she ordered guac with her chicken burrito bowl.

Jimmyliscious
Jimmyliscious

@SimpleTruths  Good Morning America was fawning over Hillary Clinton this morning.  They even mentioned that she ordered guac with her chicken burrito bowl.


She didn't like Bill guac with the Bill burrito apparently.

Visual_Cortex
Visual_Cortex

@JohnnyReb @SimpleTruths

 media has unfortunately prostituted themselves

why, it's like they're just in it to make money and turn a profit and produce dividends for their shareholders or somethin'!

JohnnyReb
JohnnyReb

@SimpleTruths - media has unfortunately prostituted themselves for political ideology.  Even FOX is too biased at times.

Our history will show media to have betrayed Americans more so than any other.

gadem
gadem

So  basically the GOP just wants to destroy America. Their plan is to destroy the infrastructure, education, Department of Justice, and the IRS....and that is just for starters.


It is amazing that people still vote for them.

SimpleTruths
SimpleTruths

@gadem "the GOP just wants to destroy America"

Not intended to be a factual statement.

St Simons he-ne-ha
St Simons he-ne-ha

@gadem  'wants to destroy' Murca?

'you can't always get, whatcha wa-a-nt....'

America will be here loooong after the Republicans are gone

DownInAlbany
DownInAlbany

@gadem Yeah, that's it.  You caught us!  Dang, what will we do now that  our plan has been discovered?

Yes_Jesus_Can
Yes_Jesus_Can

@gadem 

All the media wants to do is portray Hillary as a humble, aw-shucksing, good-ol girl gal, with fresh ideas and hope for america. 

See that declining median income for the middle class, gadem?  That's Obama's fingerprints on THAT one.

Talk about destroying!  How's the job market for new college grads?  --or do we not focus on such "partisan" issues? 

Finn-McCool
Finn-McCool

I'm sure they are counting on the Fox News watchers. I read the average age of a Bill O'Reilly viewer is 72. Angry white people? You bet.

DownInAlbany
DownInAlbany

@Finn-McCool Why do you have such a lack of respect for your elders?

Remember...you will be old one day, also.

St Simons he-ne-ha
St Simons he-ne-ha

@Finn-McCool  and in 2 yrs they'll be 74, and 5 yrs after that they'll be pushing 80. Good times. The Future is just around the corner.

Rush dropped in #2 market - WLS Chicago, and Indianapolis. ClearChannel in $23 BIl in debt. The end is near. Hillary will put them out of our misery. heheheh

Finn-McCool
Finn-McCool

@DownInAlbany @Finn-McCool You realize they only publish the ones who answer according to the agenda they are pushing, right? Jon Stewart's people do this so do you think they show on air the ones that don't fit their agenda? Hannity does these questions as well so I have to ask you the same question.

Jimmyliscious
Jimmyliscious

@Finn-McCool 

I'm sure they are counting on the Fox News watchers. I read the average age of a Bill O'Reilly viewer is 72. Angry white people? You bet.

I'm sure the average Chris Punkinhead Matthews viewer has an Iq lower than 72.


Yes_Jesus_Can
Yes_Jesus_Can

@Finn-McCool 

The Average age is 72??

Propaganda!  Which means you'll be claiming it's true for decades, not days. 

ElTombo
ElTombo

Apparently you don't read the squawks in your local newspaper, The Albany Herald. All of the real stupid squawks come from obvious republicans. They still believe the President is not an American, that he is a communist and is out to "Destroy amurica".

St Simons he-ne-ha
St Simons he-ne-ha

No matter what the article, it's still about President Hillary to them.

heheheh  she's the biggest real estate occupier in the land.

if you count the space in their heads, and their insulated bubble world

Finn-McCool
Finn-McCool

Of course they are only saying this stuff to get the one percenters to write them early checks as campaign contributions. The one percent must be big time gullible people.

Bulls_3y3
Bulls_3y3

The State Dept budget under Hillary quadrupled- $10 billion to $50 billion.Guess that's what happens when Democrats own the WH, Senate & House: uncontrolled spending.  And what did America receive for $50 billion?  A cute red button that says "Russia Reset".  Boy, that didn't end well... 


Bulls_3y3
Bulls_3y3

@Finn-McCool  are you still stealing company bandwidth or did the boss finally fire you for theft???

Yes_Jesus_Can
Yes_Jesus_Can

@Finn-McCool @Bulls_3y3 

Leftists need demagoguery, don't you, Fin? 

You need a boogey-man so you can be vulgar...."bend over" and so forth.  It's got to be racists and the 1%, doesn't it?  Are you actually so bankrupt in real ideas? 

Bulls_3y3
Bulls_3y3

@Finn-McCool  NO surprise there.  FYI- no cares about thieves especially their opinion!!!

Visual_Cortex
Visual_Cortex

@Yes_Jesus_Can @Finn-McCool @Bulls_3y3

You need a boogey-man so you can be vulgar

Just curious, YJC--how much would you need to be paid in order to go a whole day without saying anything vulgar about the President?

(Mind you, I don't know if I could manage it myself without at least a coupla C-notes, but still...)

Visual_Cortex
Visual_Cortex

@Bulls_3y3 @Visual_Cortex

it was patriotic to bash Bush

No, not bash, but criticize. We DFHs had our lines that weren't supposed to be crossed--don't go after his wife and kids, don't make crazy truther claims that he oversaw the bombing of the WTC, etc.--and we policed and marginalized as best we could, those who crossed it.

But revise history as you wish.

Bulls_3y3
Bulls_3y3

@Visual_Cortex  Funny, it was patriotic to bash Bush but today DEMs call everyone racist for bashing Obama.  Liberal hypocrites at work!!!

Visual_Cortex
Visual_Cortex

@Bulls_3y3 @Visual_Cortex

 those words are straight from Hillary.  

Hillary said "It is patriotic to bash Bush?"

Surrre she did.

headin' upstairs, but I'll just add--you continue to be terrible at this.