On Wednesday, with Capitol Hill debating tax reform, U.S. Sen. Marco Rubio, R-Fla., took to the Senate floor to make the case for expanding the child tax credit.
Rubio’s remarks were as follows:
These things are reducing the ability of families to afford to have children and to raise them, and these costs keep going up. And so one of the things that we have offered as a partial solution—it's not going to solve every problem—is to increase the child tax credit, and to do so in a way that actually helps people. Because what it would do is it would reduce families' tax bills on a per-child basis, increasing the flexibility that family has at a time when, for example, child care costs have risen more than ever before and are already higher than they have ever been. …
We have to understand the family is the most important unit in all of society. It's the most important institution in society. It's the first government. It's the first school. It's the core institution that underlies everything else we do as a nation. There is no more important job that any of us will ever do than the job of a parent. And if you think about our tax code, it says if you invest money in a piece of equipment or a business, the tax code will help you with that, but if you invest it in a future American taxpayer, if you invest it in someone who you are going to need to build the sort of economy and future we want for our nation, the tax code does not really take it into account. That makes no sense to me.
So I have two charts here to outline how important this tax credit is to tax reform. And again, I'm operating off the framework because there is no bill out yet, but based on the framework, the amount of tax relief that a working or middle-class family will get almost entirely depends, almost entirely will depend on what we do with the child tax credit.
So here is the first chart. This chart shows the average tax cut for American families if the child tax credit is doubled from its current size—not just doubled but we make it refundable against payroll tax liability, which is the tax every American pays for Social Security and Medicare. It's the first chunk that comes off your paycheck, no matter how little you make, everyone pays it.
We make the child tax credit double and we apply it towards your liability on payroll tax, this chart which is what I have proposed, what Senator Lee and I have been working on, what Ivanka Trump has been advocating and we’ve been working with her office on. And this shows you what the impact of that would be, and that's the blue line. And you can see from the blue line that that chart begins with some cut, depending on how much money you make, and it begins to drop as the amount—obviously, the more money you make, the larger the credit will be up to its limit because you can't get a credit if you're not making any money at all, even if applies to payroll tax. But you start to see it also grows with the number of children because it's per child. So it doesn't just phase off at two children. And that's the blue chart.
Now, what's the red chart? The red chart is if we do nothing, or basically just do a gimmicky thing about it. Then you start to see that without the child tax credit being made refundable and without the child tax credit applying to payroll refundable and without the child tax credit being per child and sufficiently increased, this framework would be a tax increase. People will actually pay more. And the more children you have, the bigger your tax increase will be. So suffice it to say, we’ve got to do it. This red line cannot be what we wind up at. I don't think that's the intent of the people that drew up the framework, but that's where we wind up if we don't do it.
So I pull that chart out just to show you how important it is that we do it as part of this framework. It has to happen. It won't pass without it. And it's the right thing to do. This is a pro-job, pro-family initiative. And I actually think it's pro-growth. It's hard for economists to measure it that way but it would be. There are a lot of people that can't start a business because they can't afford to leave the security of a certain type of employment. The tax credit frees that up for them to be able to do.
So let me get to the second chart if I can get it up here real quick. This kind of shows you basically the same dynamic but now based on how much people are making, what kind of jobs they do. So we picked out, just arbitrarily, some of the jobs that many of us know people are in these fields – a home health aide, a retail person working sales at Macy's or whatever, office clerks, we all see office clerks every day, a truck driver, a vocation like a nurse, firefighters, obviously I have three firefighters in my own family.
And, again, the $1,500 tax credit with only the first $1,000 refundable, you start to see that red line here, how pathetic it is for these folks in these professions. Doesn't really do much. But look at the blue line. That's where we want to get to. That's at least $2,000 child tax credit applied to their payroll tax. And now you start to see the figures get better here. You start to see the home health aide getting about $1,000 in relief. The retail salesperson a little bit under $1,000. The truck driver - between the truck driver and office clerk getting down here to $1,400. The nurse getting down here at about $1,200. The firefighter getting down here to about $1,200.
Now a lot of people are going to tell you $1,200, $1,400 is not going to change the world. It will help. I didn't say this is a solution to every problem. The other solution is to get these salaries up higher. That's the other part of it. But the other solution is to get the cost on some of these things lower like get a grip on the cost of getting college credits. The other solution is to provide more opportunities for child care options for people. But there's no way this doesn't help. It helps. It helps. And it helps the people we need to help.
And it helps us get closer to the goal that we all have for this nation, and it is a place of equal opportunity, because we pride ourselves on equal opportunity, but I am telling you that we are lacking equal opportunity if two children growing up in two different homes, one has access to quality pre-k education and then quality schooling and then the right support for that schooling, and one does not. By the time you're a junior and a senior, it hurts you. It absolutely hurts you on your way forward in life. This is not the solution to all of our problems. That would be misleading. But it is a big step in that direction and it would show in tax policy that we are supporting the most important institution in society, which is the family. The most important function any of us will ever do which is to be a parent. And we are investing in America's future.
The children being raised, the two, three, four children, you know who those are? Those are the people that are going to fund Social Security and Medicare when I retire and many of you retire. These are the people that are going to be starting the businesses and these are the people that are going to be the backbone of our economy, not in 50 years. In the next 10, 15, 20 years. This is the future of America literally and figuratively, the future of our nation that we would be investing in. And we would be allowing their parents to make that investment on their behalf who are the right people to be making it.
And so this has to be a part of whatever else happens. And I think this has strong bipartisan support. I know the White House supports it. I'm optimistic that it will happen. The only thing that will keep it from happening is if tax reform itself goes down. But this has to happen. There's no choice but to do it, and it's the right thing to do. And I'm pleased we've come this far on it. Now I look forward to the work to get it achieved, but it can't just be a gimmick. It can't just be, we increased the child tax credit by a little bit. If we don't do it right and sufficiently and structured in an appropriate way, you'll be raising taxes on working families. That can't happen. I know no one here wants to see that happen.
And so we'll have a lot of debates about everything else but this is the one I hope will have strong bipartisan support as we move forward on tax reform and I'm excited to be able to work on it.
U.S. Sen. Marco Rubio, R-Fla., was first elected to the U.S. Senate in 2010.
