Would the Lee-Rubio Tax Plan Help Lower-Income Households?

Issue Briefs | Taxes

No. 172
Tuesday, September 22, 2015
by Tyler Prochazka and Pamela Villarreal

Since the roll-out of the Lee-Rubio tax proposal in March 2015, the Center on Budget and Policy Priorities and the Tax Foundation have disagreed whether the plan would benefit people at all lower income levels. The short answer is: It depends.

The Tax Foundation found that, on average, taxpayers in every income group would have higher after-tax incomes under Lee-Rubio, particularly low-income earners. However, the Center on Budget and Policy Priorities argues that if the current child tax credit were eliminated, the Lee-Rubio plan would reduce the after-tax income of minimum-wage income earners.

The Lee-Rubio plan is short on details regarding several provisions that could make a significant difference,
particularly for those between poverty and the middle class. Overall, though, low-income taxpayers will be better off under Lee-Rubio if Congress continues existing tax credits that are not discussed in the proposal, such as the earned income tax credit (EITC) and the additional child tax credit.

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