GOP Sens. Marco Rubio of Florida and Mike Lee of Utah are rolling out an overhaul of the tax code on Wednesday that, among other things, consolidates existing tax brackets and provides for a per-child credit for parents.
The two Republicans offered a preview of their plan in a Wall Street Journal piece, writing that restoring shared prosperity that comes with a strong economy “requires reforming the most antiquated and dysfunctional government policies, beginning with the federal tax system.”
They wrote that the tax code’s failures are rooted “in the same fundamental unfairness and inequity of a government that picks winners and losers.”
Their plan would lower the maximum corporate tax rate to 25 percent on both corporate and pass-through entities, eliminate “double taxation” of capital gains and require firms with overseas operations to be taxed only in the country where income is earned.
To spur growth, the plan would also allow businesses to deduct expenses when they purchase new equipment or upgrade inventory.
On the individual filing side, the plan would consolidate the seven existing brackets into two groups — 15 percent and 35 percent — and make remaining deductions available to all filers.
The senators also say they’ll eliminate the “marriage penalty” that taxes married couples at a higher rate than if they filed individually and create a new $2,500-per-child tax credit for parents.
“We believe that pro-growth, pro-family tax reform will empower the American people to succeed in a revived free market, in which everyone has an equal opportunity to participate,” they wrote. “We believe that doing so is an essential step toward restoring the American dream and bringing it into reach of more people than ever before.”