Frustrated with the media coverage of Sen. Marco Rubio’s (R-FL) viral critique of the Republican tax bill, Rubio’s office has published the rest of the senator’s comments, which are still a scathing critique of the law.
In newly published remarks, Rubio undercuts the true impact of the corporate tax cut, the central part of the Republican tax reform package, and seemingly questions his Republican colleagues’ dedication to helping the working class.
“I had no problem with cutting the corporate rate,” he said in the interview with the Economist. “I just felt that we could have cut it a lot, to 22 to 21, and use that extra point as a tax cut, but instead of for the multinationals, applied it to working families making $50,000 to $60,000 a year. ... And we did some of it, but the fact that we had to fight so hard to achieve it and the arguments that were used against it showed me how far we have to go.”
Rubio who voted for the final package after winning a slightly more generous child tax credit, said there are a lot of “net positives” in the new tax bill; however, he repeatedly gave a harsh assessment of the biggest reform: the massive corporate tax cut.
The tax law gives corporations a huge permanent tax cut, lowering the rate from 35 percent to 21 percent, which Republicans argue will push corporations to invest more in the United States, raise wages, increase jobs, and unleash unprecedented economic growth. As Vox explained, there isn’t too much evidence to this effect, and workers would only receive a quarter or less of the benefits from tax cuts — and among those workers, it’s likely the higher earners who would benefit.
Originally, Republicans tried to bring the rate down even more, to 20 percent. Lessening that reduction by even a mere 1 percent, to have more revenue for other reforms like Rubio’s child tax credit, was a “massive” fight, Rubio said.
“We, at one point, proposed a corporate rate of 20.9 percent to be able to fully do what we wanted,” Rubio said. “We did the .9 just to show the absurdity of it. And it was a massive fight because at the end of the day there was still a lot of thinking on the right of center that if Apple is happy and the big corporations are happy, they are going to take the money they are saving and reinvest it back into American workers.”
Rubio argued that while there might be more investment because of the Republican reforms, it’s not because of the corporate tax cut, but because of a different provision in tax law that allows companies to write off their investments the year that they’re made (also known as full expensing).
The backstory of Rubio’s office publishing the entirety of the senator’s Economist interview is mostly an insider tale of reporting on Congress. In short, one of Rubio’s comments critiquing the tax bill in the Economist interview was picked up by multiple national outlets (including Vox). Rubio wrote an op-ed in National Review to clarify that he thought the tax bill was good on the whole and “helps workers,” which Politico described as him “walking back” his comments to the Economist. Rubio’s office claimed this was the senator’s position all along (Rubio called out Politico on Twitter for the article being written by an intern), and because Politico wouldn’t run a correction, it published the transcript of the tax portion of Rubio’s interview with the Economist.
All of that is kind of beside the point. What’s interesting is that this entire drama and the transcript of Rubio’s comments go just as far to dismantle the signature Republican legislative accomplishment in the past year as the original viral remark did.
The full transcript of Rubio’s interview with the Economist on the tax bill, as released by his office, is below:
RUBIO: We, at one point, proposed a corporate rate of 20.9% to be able to fully do what we wanted. We did the .9 just to show the absurdity of it. And it was a massive fight because at the end of the day there was still a lot of thinking on the right of center that if Apple is happy and the big corporations are happy, they are going to take the money they are saving and reinvest it back into American workers. When in fact they bought back shares — they’ll invest in automation and productivity that way – a few of them gave out bonuses in the short term, but there’s no evidence whatsoever that this was massively poured back into the American worker.
I still think there are a lot of net positives of tax reform, let there be no doubt. I do think a lot of small businesses will now expand and immediately invest. But that had less to do with the rate, and more to do with the immediate expensing component of it. It had more to do with that than it did with the corporate rate.
I was not a big a fan of slashing massively the taxes of multinational corporations who aren’t even American companies. We shouldn’t be discriminatory towards them, but we don’t have any special obligation towards them either. These are citizens of the world…
The problem is that growth as I said, if you’re a multinational corporation, you may be growing but that doesn’t necessarily mean it’s helping Americans. Your shareholders are from all over the world, your customers are from all over the world, your supply chain, and your production chain may not even be in the United States. The idea that massive growth by some large entity that is a multinational footprint is going to somehow benefit Americans especially because they happen to be headquartered in the United States --
THE ECONOMIST: So you were unhappy with the tax reform because of the cuts to the corporate rate?
RUBIO: I had no problem with cutting the corporate rate. I had proposed a cut myself. I just felt that we could have cut it a lot, to 22 to 21, and use that extra point as a tax cut, but instead of for the multinationals, applied it to working families making $50,000 to $60,000 a year. It wouldn’t have changed their lives, but would have shown we care. And we did some of it, but the fact that we had to fight so hard to achieve it and the arguments that were used against it showed me how far we have to go.