One day after Hillary Clinton formally stepped into her role as the clear Democratic frontrunner, the Republican race grew more crowded, as Sen. Marco Rubio (Fla.) officially announced his bid for the White House.
Rubio is no stranger to small businesses and their policy interests in Washington. He has served on the Senate Small Business and Entrepreneurship Committee since arriving in the Senate in 2010 and his since authored and introduced several bills directed at small businesses. They have featured proposals that would expand certain tax breaks, reduce regulatory barriers to raising money and permit companies to bring in more talented workers from overseas.
It appears from his speech announcing his candidacy that those ideas will continue to be a part of his platform.
“If we reform our tax code, reduce regulations, control spending, modernize our immigration laws and repeal and replace Obamacare, the American people will create millions of better-paying modern jobs,” Rubio said during the speech in Miami.
Speaking about the American Dream, he added that “too many Americans are starting to doubt whether achieving that dream is still possible … [including] small-business owners, left to struggle under the weight of more taxes, more regulations and more government.”
How exactly would Rubio ease the tax and regulatory burden on employers, and what other ideas does he have in mind to help more new companies get off the ground and grow? Here’s what entrepreneurs and business owners should know about a potential Marco Rubio White House.
He favors a flatter tax and small-business breaks
Rubio, like most in his his party, believes the current tax system is far too complicated. While his tax reform plan wouldn’t quite leave the country with a true flat tax (like the first two senators in the Republican race, Ted Cruz and Rand Paul), it would dramatically simplify matters. It would include only two tax brackets and remove all but a few deductions.
“Simplifying our tax code will also help the middle class, because it will make it easier for small businesses to hire and grow,” Rubio said during his response to the president’s State of the Union in 2013 (yes, the water bottle speech).
Some of the nuances in the tax code that Rubio has fought not merely to keep but to expand, include tax breaks for small businesses that invest in research and development, as well as deductions for those purchasing new equipment — the latter of which has been reduced in size in recent years.
Rubio’s tax plan has made the most noise not for what it cuts, but rather for one its proposed new additions. Rubio, who drafted the tax proposal with Sen. Mike Lee (R-Utah), wants to add a $2,500-per-child tax credit to certain families — a move that would likely sit well with the middle class but one that critics warn would add trillions to the federal deficit over the next decade.
He’s opposed to online sales tax legislation
One of the hot-button tax issues for small businesses has been so-called online sales tax collection. Currently, states don’t have the authority to charge sales tax on retailers who sell goods over the Internet. Brick-and-mortar shop owners say that gives online merchants an unfair advantage in the form of lower prices, while governors say it robs their states of tax income.
In response, Congress has several times taken up the Marketplace Fairness Act, as its called, which give states the power to collect sales tax on Internet purchases. The bill has been shot down each time over concerns that small online retailers would suddenly have to monitor, collect and file sales tax to any number of different states, even if they can’t vote in those states. Rubio’s voice has been among that chorus of critics.
“The Internet sales tax is a terrible idea that will crush small businesses with the new burden of having to collect taxes from their out-of-state consumers,” he said in a statement responding to a vote on the bill in 2013. “The Internet sales tax is nothing more than a money grab by tax-hungry state and local governments that are desperate for more revenue because they refuse to cut spending.”
He later added that “as far as job-killing taxes go, the Internet sales tax is the worst kind because, rather than only take the hard-earned money of small businesses, it imposes more complications and burdens for businesses to comply with.”
He believes small businesses suffer from far too much red tape
During his four years on the small-business committee, Rubio has been among the panel’s loudest critics of mounting regulatory burdens on small businesses. In May 2013, he pitched the Regulation Costs to Small Business Act, which would require the Small Business Administration to conduct a new study every year to determine the total costs of regulations on small firms. He followed that up with the Regulation Costs to America Act, which would require the Government Accountability Office to file a similar report.
“More government breeds complicated rules and laws that a small business can’t afford to follow,” Rubio said in the 2013 State of the Union response. He added: “What we need is an accountable, efficient and effective government that allows small and new businesses to create middle class jobs.”
He supports restructuring student loan payments
It isn’t only small-business owners that Rubio this week said are “starting to doubt whether achieving that [American] dream is still possible.” It’s “young Americans, unable to start a career, a business or a family, because they owe thousands in student loans for degrees that did not lead to jobs,” he added.
Rubio, along with Sen. Mark Warner (D-Va.), introduced legislation last year intended to improve what both parties agree is a major problem right now: the current system for awarding and collecting payments on student loans.
The bill attempts to bring an end to what is currently a complicated repayment process in favor of basing each individual’s loan payments on his or her income. In addition, the government would automatically collect the payments from borrowers’ paychecks, making the process simpler and potentially reducing costs by eliminating loan servicer payments.
Success addressing the country’s student-loan woes could help address the country’s entrepreneurship woes too. The rate of new business formation has fallen in recent years, and mounting research points to student debt as one of the main culprits, deterring otherwise prospective entrepreneurs from setting out on their own as they seek more secure jobs to help them pay back loans.
He has been at the center of the effort to overhaul the immigration system
Rubio was one of four Republicans on the so-called Gang of Eight that authored and pushed through the Senate a massive immigration overhaul package in 2013. The bill, which never gained traction in the House, would have created a path to citizenship for many unauthorized immigrants, added requirements for employers to ensure that their workers are authorized to work in the country, and allowed firms to hire more highly skilled foreign workers.
It wasn’t the first or last time Rubio has pushed for that latter change. In 2011, he introduced legislation that would have nixed per-country caps on the number of visas that can be awarded to workers with advanced degrees in fields such as science and math. In January, he was one of three Republicans who teamed up with three Democrats to introduce a bill that would go even further by allowing U.S. companies to hire an unlimited number of foreign workers with degrees in science and math fields from U.S. schools.
“America deserves an immigration system that works for our economy, drives innovation and creates good-paying jobs,” Rubio said after floating the bill.