Sen. Marco Rubio says the GOP “probably went too far” in slashing the tax burden on corporations.
The Florida Republican told the News-Press of Fort Myers that corporations will largely use their major tax cut to buy back shares or increase dividends to shareholders — which “isn’t going to create dramatic economic growth.”
“If I were king for a day, this tax bill would have looked different. I thought we probably went too far on (helping) corporations,” Rubio told the newspaper in the interview published Friday. “By and large, you’re going to see a lot of these multinationals buy back shares to drive up the price. Some of them will be forced, because they’re sitting on historic levels of cash, to pay out dividends to shareholders.”
“That isn’t going to create dramatic economic growth. (But) there’s a lot of things in the bill that I have supported for a long time (such as) doubling the Child Tax Credit. And it is better — significantly better — than the current code,” he continued.
The tax plan that President Donald Trump signed into law last week permanently chops the corporate tax to 21 percent from 35 percent. Republicans say the change — which starts Monday — will drive domestic investment, boost wages and fuel economic growth over time.
At least a dozen companies — including mammoth employers like AT&T and Boeing — announced plans to raise their minimum wages, increase capital investment or hand out employee bonuses after the plan’s passage. While Republicans have cheered those announcements, some critics of the corporate tax cut have maintained most of those benefits will likely go to shareholders rather than workers.
Rubio, who sought the 2016 GOP presidential nomination, supported both the Senate GOP’s tax bill and a joint House and Senate version that the president signed. He pushed first for a doubling of the child tax credit from $1,000 to $2,000, then for increasing the refundable portion of that credit to $1,400.
During the Senate tax debate, Rubio proposed expanding the credit and paying for it by cutting the corporate tax rate by less than the GOP initially intended.