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Marco Rubio and Supply Siders Need to Work Together to Successfully Pass Tax Laws

Updated: Mar 24, 2023

By Ryan Ellis

It’s fair to say that comments made by Senator Marco Rubio (R-FL) about the corporate tax reform in the Tax Cuts and Jobs Act have created quite the scrape between the pro-growth and pro-family/middle class wings of the tax cutting movement.

It’s also important to note that there’s plenty of blame for this feud to go. For every ill-advised musing by the Republican senator about cutting the corporate tax rate too deeply, there’s a volley from the Wall Street Journal editorial page taking a swipe against the child tax credit.

Each side needs to recognize, once and for all, that they need each other. Going back to the Kennedy tax cuts of 1964, and all the way through President Trump’s “Tax Cuts and Jobs Act” last December, we have a clear and unbroken record of successful tax legislation which is both pro-growth and pro-family/middle class. Interestingly, we have zero examples of successful tax laws which are all one or all the other. No doubt, each side would view their half of the equation as less than fully served each time. But indeed, progress has been made on all fronts over time.

Below is a list of the major tax bills and what each side “got.” This is not meant to be exhaustive, but rather to touch on the first tier elements of each law and how they helped each side of the tax cutting coalition.

Pro-Growth Tax Cuts Pro-Family Middle Class Tax Cuts

Kennedy tax cuts Cut the top personal rate Cut the corporate tax rate from 52%

from 91% to 70%. to 48% Created a “zero bracket”

Cut all tax rates across the board, equal to the greater of 10 percent

including cutting the lowest rate of AGI or $8000 for a large family

from 20% to 14%. plus personal and dependent

exemptions of $4800 per person

(adjusted for inflation)

1978 Revenue Act Cut the capital gains tax rate Increased personal and dependent

from 40% to 28%. Cut the exemptions and increased

corporate income tax rate from the standard deduction

48% to 46%.

1981 Economic Cut the top personal rate from Cut tax rate for all tax brackets

Recovery Tax Act to 50%. Cut the capital gains rate and indexed tax brackets to inflation

from 28% to 20%. Depreciation Cut lowest tax bracket from 14% to

accelerated. 11%.

1986 Tax Cut the top personal rate from Increased standard deduction to

Reform Act 50% to 28%. Cut the corporate $11,000 for married couples and

tax rate from 46% to 34%. increased personal and dependent

exemption to $4500 (adjusted for

inflation). Millions of families taken off

the tax rolls.

1997 Taxpayer Cut the capital gains tax rate from $500 child tax credit created.

Relief Act 28% to 20%. Roth IRA created. Education tax credits created.

Capital gain exclusion on the sale of

middle class homes.

2001-2003 Bush Top personal rate reduced from Child tax credit doubled from

Tax Cuts 39.6% to 35%. Capital gains tax rate $500 to $1000. Marriage penalty

reduced from 20% to 15%. Death eliminated in low brackets and

tax phased out.   standard deduction. 10% lowest

bracket created.

2017 Tax Cuts Top personal rate reduced from Child tax credit doubled from

and Jobs Act 39.6% to 37%. Corporate tax rate $1000 to $2000. Standard deduction

reduced from 35% to 21%. doubled to $24,000 for married

Temporary full business expensing. couples. Large working and middle

Hybrid territorial tax system. class tax rate cuts

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