Sens. Marco Rubio and Mike Lee are adamant that any tax overhaul bill must benefit working families and corporations alike, and they’re willing to support a smaller cut to corporate taxes in order to pay for an increased child tax credit.
President Donald Trump doesn’t like the idea.
Rubio, R-Fla., and Lee, R-Utah, announced Wednesday that they want to increase the federal corporate income tax rate to 22 percent from the 20 percent proposed in the Senate’s tax overhaul bill. The corporate tax increase would pay for a child tax credit that reduces some families’ tax bill for every child they have under the age of 17.
“We have a chance to do better by working families in this tax bill,” Rubio and Lee said in a statement. “Right now, 70 percent of the tax cuts we’re considering would go to businesses, and only 30 percent to individuals. This amendment would level the playing field for families, while still kick-starting national investment and growth. By increasing access to the Child Tax Credit, we can increase working family fairness and deliver overdue relief to America’s greatest investor class: our moms and dads.”
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Rubio and Lee have repeatedly said that Republicans will pay at the ballot box if it is perceived that their tax plan doesn’t do enough to help working families. The pair did get the child tax credit increased to $2,000, which is higher than the current ceiling of $1,000, but they are arguing that more must be done.
Rubio and Lee’s plan would also make the $2,000 tax credit fully refundable, meaning that if a low-income family’s tax credit exceeds their total amount owed in taxes, they would be eligible for a tax refund. The tax credit would also be tied to the rate of inflation, which means the tax credit will increase if inflation increases.
“I’m not going to vote for an increase on the middle class,” Rubio said in October. “But we’re not going to get to that point. We’re not that crazy around here.”
President Donald Trump called the proposed 20 percent corporate tax rate a “perfect number” earlier this year, though at one point he wanted an even bigger cut to 15 percent. A White House official confirmed to the Miami Herald that Trump opposes Rubio’s plan.
“We do support the child tax credit. We also think it’s important to make businesses more competitive. We would not support raising the corporate rate as outlined in that amendment,” said White House spokesman Raj Shah.
Rubio and Lee are presenting their idea as an amendment to the larger tax bill as the Senate begins their official period of debate, and a vote on the bill could happen later this week. Their idea could garner Democratic support even though no members of the minority have indicated they will vote in favor of the final bill.
The child tax credit amendment will likely be part of a vote-a-rama where dozens of amendments will get an up-or-down vote. A vote on the final bill will take place after the vote-a-rama.
Maine Sen. Susan Collins, a moderate Republican who is seen as a key vote for any tax overhaul effort, said Wednesday that she also supports an expanded child tax credit that is fully refundable, though she supports raising the corporate tax rate to 21 percent instead of 22 percent.
It’s unclear whether Rubio and Lee’s idea has widespread Republican support. South Dakota Sen. Mike Rounds said the child tax credit amendment didn’t come up at the GOP’s Wednesday lunch meeting.
McClatchy DC staff writers Anita Kumar and Lesley Clark contributed to this report.