Senator Rick Scott’s tax plan would target the poor, the rest
About 50% of Americans in the bottom half of the income distribution pay no federal income tax because they don’t earn enough to be subject to income tax and because many receive credits of tax. Millions of these Americans pay federal and state taxes in the form of payroll taxes, sales taxes and other levies.
“All Americans should pay income tax to get in on the game, even if it’s a small amount,” Scott’s proposal states. “Currently, more than half of Americans pay no income tax.”
Scott’s speech comes at an uncertain time for conservative policymaking as Republicans debate the extent to which they need a proactive agenda to contest the 2022 midterm elections. Senate minority Mitch McConnell (R-Ky.) has been adamant that the Senate GOP will not release a platform before the election, saying the party need only reveal its plans to lead the Congress “when we resume it”.
This position has proven unpopular with some Republicans who believe the party should come up with a set of policy priorities. House Minority Leader Kevin McCarthy (R-Calif.), for example, is preparing a comprehensive legislative package for House Republicans. Scott’s 11-point proposal includes many other long-standing conservative plans, such as eliminating the Department of Education, building former President Donald Trump’s border wall and declaring that there is no has only two sexes.
“I’ll warn you,” Scott wrote in the introduction to his plan. “This plan is not for the faint-hearted.”
He predicted the plan would face a backlash, and he was right. Some pundits have pointed out that Scott’s push for a nominal federal income tax runs counter to the GOP’s attempt to tie higher taxes to the Democratic Party. Others pointed out that Trump found political success in rejecting cuts to Social Security, Medicare and other programs popular with the poor and middle class. By contrast, Scott’s rhetoric harks back to Mitt Romney’s widely criticized comments during the 2012 presidential campaign, saying the “47%” of Americans who don’t pay income tax would automatically support the Democratic Party.
“It’s dramatically off the message about where Republicans are going on taxes — they shouldn’t be talking about raising anyone’s taxes,” said Brian Riedl, former aide to Sen. Rob Portman (R-Ohio) and senior fellow at the Manhattan Institute, a center-right think tank. “The GOP has moved away from the ‘makers and takers’ framework of 2010 – so it’s a bit outdated.”
Samuel Hammond, a policy expert at the Niskanen Center, another center-right think tank, also pointed out that the 2017 GOP tax cut doubled the standard tax deduction — and therefore the number of Americans not paying no federal income tax. About 100 million Americans paid no income tax in 2021, according to the Tax Policy Center, a nonpartisan think tank. This number will likely decrease in 2022 as extensions to pandemic-era government programs expire.
Scott said seniors would be exempt from the measure, but it was unclear how the nominal tax would then apply to all Americans. The proposal also appears to raise taxes on the working class and poor, who make up the majority of Americans who do not pay income taxes.
“Wasn’t it supposed to be a big success of Paul Ryan’s tax plan that they increased the standard deduction dramatically?” said Hammond.
White House spokeswoman Jen Psaki said on Twitter: “Senate Republicans just released an economic plan that doesn’t include a single middle class price cut proposal. Instead, he wants to raise taxes on half of Americans — including seniors and working families.
Some Republicans defended the Florida senator’s pitch. Former House Speaker Newt Gingrich praised Scott for trying to craft a GOP policy platform ahead of the 2022 midterm elections, without endorsing all of the platform’s specific ideas.
“It at least raises important questions about ‘Should every American have a stake in the country?’ McCarthy is moving in the right direction that we need to have something positive — both to communicate with voters and to get our own candidates thinking about governing next year.
Frank Luntz, a former GOP pollster, said in an email that he thought the proposal would be popular.
“Scott clearly appeals to the center of the political and social spectrum,” Luntz said. “Most Americans think everyone should pay at least some tax, but no one wants to pay more than their fair share.”
In a statement, Scott said, “What my plan addresses is the shortage of people willing to work caused by Joe Biden and the Democrats who decided to pay people more not to work. . He speaks of able-bodied people who receive a salary rather than work, and not of those who already contribute to the system. We need to get the Americans back to work. Making sure every American has their skin in the game is one way to do that, and the American people agree.
Asked by Fox News on Tuesday night about criticism from Democrats that his proposal would raise taxes, Scott replied, “Of course not,” although his proposal appears to raise taxes.
Scott’s plan includes a number of other very aggressive conservative ideas that would radically alter the federal government and provide fodder for Democratic attacks.
Chief among them is his plan to cut the Internal Revenue Service’s budget by up to 50%, a provision that would make enforcing the country’s tax laws much more difficult. His plan also includes a new “12-year” limit on the careers of all members of Congress and federal workers except national security personnel, which would force dozens of current GOP lawmakers out of office. seat. Scott’s proposal also calls for scrapping increases to the federal debt ceiling in the absence of a declaration of war, though Republicans under Trump have repeatedly raised the country’s debt ceiling to fund the spending expansion. public in times of peace.
Perhaps the most dramatic change in Scott’s plan is his talk of “all” federal laws expiring after just five years, which, if ever enacted, would greatly complicate the legislation.
Even some of Scott’s allies have said his timing could hurt Republicans.
“It kind of raised a lot of people’s eyebrows. … There was a buzz about: Is that the smart thing to say right now, given that we have Democrats on the run? said Stephen Moore, who served as Trump’s economic policy adviser, of Scott’s income tax proposal. “I’ve been saying for 30 years that everyone should pay some income tax, if you’re going to vote and get government benefits. But is now the smartest time to say that? No.”
Indeed, Democrats were quick to seize on Scott’s plan. The Democratic Senate Campaign Committee announced Wednesday morning that it is launching a five-figure radio ad campaign focused on highlighting tax hikes for millions of Americans. Congressional Democrats have argued that Scott’s comments reflect the GOP’s belief that much of the United States is not working hard enough.
“Trump’s populist rhetoric has temporarily obscured what is at the heart of Republican orthodoxy: that half of Americans are takers and moochers,” said Rep. Brendan Boyle (D-Pa.), House Ways Fellow. and Means Committee.
Scott tried to assuage some of the critics on Wednesday, appearing to assert that his plan would only apply to “able-bodied” workers even though his original plan stated that “all Americans” should be subject to the measure.
“The change we need to make is to require those who are able-bodied but won’t work to pay a small amount so we’re all in this together,” Scott said on Twitter.
But many conservative tax experts were quick to point out that the clarification does little to clear up confusion about how Scott’s plan might work in practice.
In 2019, the bottom 40% of taxpayers received about $119 billion more in tax credits than they paid in income taxes, according to Riedl. Closing that gap would likely mean ending or drastically reducing major programs aimed at helping low-income workers. Scott did not say, for example, whether he would end the child tax credit and earned income tax credit traditionally supported by Republican lawmakers.
Most working Americans already face tax debt, said Kyle Pomerleau, tax expert at the American Enterprise Institute, a center-right think tank. The only way to ensure that retirees and non-working people pay taxes would be to either tax government benefits, such as Medicare; enact a federal consumption tax to encompass those who do not work; or simply force the unemployed to pay fees, according to Pomerleau. Scott did not explain which of these options he might support.
Michael Strain, an economic policy expert at the American Enterprise Institute, a center-right think tank, said he agreed with Scott’s “underlying motivation” to make sure everyone in the country contributes to society at large.
“But I don’t think that means everyone has to contribute to the personal income tax system,” Strain said. “Raising children is a contribution; work is a contribution; being a member of your community is a contribution. Yes, let’s have a stronger standard that everyone is a contributing member of our society – but I don’t know why that means everyone has to contribute through a nominal income tax.