(CNSNews.com) – Sen. Marco Rubio (R-Fla.) said the tax reforms President Barack Obama mentioned in his State of the Union Address Tuesday would harm job creation and not make a dent in the national debt.
Obama told a joint session of Congress that tax reform must follow what he called the “Buffett Rule,” based on billionaire Warren Buffett’s assertion that his secretary is subject to a higher tax rate than he is. “If you make more than $1 million a year, you should not pay less than 30 percent in taxes,” Obama said.
Under the tax code, the highest rate for investment income is 15 percent. The highest tax rate for wages is 35 percent. Thus, someone who is wealthy from investment income – but not salary – may end up paying a lower percentage of federal taxes than someone who derives less income from salary alone.
Rubio said taxing investments at a higher rate would discourage investment, making it more difficult to start a new business or expand an existing one.
“What he’s not being honest with the American people on is two things,” Rubio told CNSNews.com.
“The taxes he’s talking about raising are taxes on job creation,” Rubio said. “It’s investment income, which is money that people make available to businesses to grow or to start. Why would we do that? Why would we make it harder for people to give money for middle class job creation?”
“And the second thing is, if we raise all the taxes the president is promising to raise, it wouldn’t make a dent on the debt,” Rubio continued. “It wouldn’t raise nearly enough to begin to make a dent on the debt. On the other hand, it would kill a lot of jobs. All these State of the Union speeches are poll-tested. He hit a couple of key lines. But the fine print of what he’s actually proposing would not do the things he says it would do.”
CNSNews.com also asked Rubio, “Do you think he can make the case this year that Americans were better off than before he took office?”
“Look, I understand, he inherited a very bad economy,” Rubio said. “But everything has gotten worse since he has taken over. For two years of his presidency, he could have had anything he wanted out of the Congress. He chose the wrong things.
“Now people are hurting for it. I hope this year we’ll make some progress and then the American people will pass judgment in November as to whether his contract should be extended.”
Obama did not provide details of his tax reform proposal, but it’s widely understood to mean a doubling of the capital gain (investment) tax rate.
“Now, you can call this class warfare all you want,” Obama said Tuesday night. “But asking a billionaire to pay at least as much as his secretary in taxes? Most Americans would call that common sense.”