WASHINGTON (AP) — With an eye toward a possible run for the White House, Republican Sen. Marco Rubio signed onto an extensive plan Wednesday to cut taxes for investors, parents and businesses in an effort to spur economic growth and create jobs.
The plan would likely add billions to the national debt, though no official assessment has been done. To address the nation's finances, Rubio said, Congress should pair a "pro-growth" tax overhaul with significant changes to Social Security and Medicare, a stand that could draw criticism from advocates for older Americans.
The Florida senator joined with Republican Sen. Mike Lee of Utah to unveil the package Wednesday. It builds on a plan the two senators first announced last year.
The package would simplify tax filing for most families, reducing the number of income tax brackets from seven to two. It would eliminate investment taxes on capital gains and dividends, providing big tax breaks for wealthy families. It would boost the $1,000-per-child tax credit to $2,500 per child, and it would eliminate income restrictions on receiving it.
The deduction for mortgage interest would be limited and all other itemized deductions would be scrapped, except for the one for charitable contributions.
The standard deduction and personal exemptions would be replaced by a tax credit of $2,000 for individuals and $4,000 for joint filers.
Business tax rates for large corporations and small businesses would be reduced, though companies could no longer deduct interest on new debt, a big issue for many firms.
"Our hope here is to trigger economic growth," Rubio said. "We believe that economic growth will help all Americans, to improve how much money they make, by creating better-paying jobs, by making America the best place in the world for those better-paying jobs to be created."
"I would say the vast and overwhelming majority of Americans will see significant tax relief here," Rubio added.
Lee called the package "pro-growth and pro-family at the same time."
Rubio is a potential Republican candidate for president in 2016.
"Let me just say that no matter what I run for, whether it's the Senate or the presidency, of course this will be part of our platform," Rubio said.
When asked about potential revenue losses from their plan, Rubio and Lee said any evaluation should include the plan's effect on economic growth.
Rubio said that any plan to attack the nation's growing debt should pair spending cuts with efforts to boost economic growth.
"Our generation is going to have to accept that our Medicare and our Social Security is going to be different than our parents'," Rubio said. "It's still going to be the best thing in the world, but it's going to be different."
The Rubio-Lee package came the same day a group of senior Democrats from the House and Senate unveiled a proposal to expand several tax breaks that target low- and middle-income families. President Barack Obama championed the proposals as part of his 2016 budget plan.
Obama has said he would like to work with congressional Republicans to overhaul business taxes. But administration officials have said there are too many disagreements among Democrats and Republicans to realistically tackle individual taxes.
The Rubio-Lee package would reduce the top income tax rate for individuals from 39.6 percent to 35 percent. The new top rate would apply to income above $75,000 for single filers and above $150,000 for joint filers. Income below those thresholds would be taxed at 15 percent.
The package would reduce the top corporate income tax rate from 35 percent to 25 percent. It would also eliminate U.S. taxes on the foreign profits of U.S.-based businesses, a huge boon to these firms.
Business owners who report business income on their individual returns would get a top tax rate of 25 percent. And all businesses would be able to write off capital expenses immediately, eliminating a complicated system of depreciation.
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