Sen. Marco Rubio (R-Fl.) gave a speech Monday that Mitt Romney never could have. He talked about his father, an immigrant bartender, and he echoed the fears and aspirations of poor and middle-class workers across America.
"My father stood behind a small portable bar in the back of a room for all those years, so that tonight I could stand behind this podium in the front of this room," Rubio said, announcing his campaign for the presidency. "That journey, from behind that bar to behind this podium, is the essence of the American Dream. Whether or not we remain a special country will depend on whether that journey is still possible for those trying to make it now."
Many Republicans see Rubio as their party's best chance to win over an anxious crop of swing voters whose incomes have stagnated in recent decades. That's because he can deliver a speech like that one, and it's because he's actively engaged in an attempt to craft conservative policy solutions to middle-class problems.
If he wins his party's nomination, though, Rubio will have to defend a tax plan that, while said to address the challenges of the middle class, includes a huge break that all-but bypasses the middle and greatly boosts the rich. It was a tax plan that was even too large for Romney himself to run on.
The latest version of Rubio's tax plan, which he released with fellow Sen. Mike Lee (R-Utah) in March, shrinks the income tax down to two rates, lowering the top rate in the process, and includes new tax breaks for working families. It also eliminates all taxes on dividends and capital gains. That's where rich taxpayers cash in. They are overwhelmingly the ones in the economy who draw income from capital, such as holdings and sales of stocks.
"The benefits of low tax rates on capital gains accrue disproportionately to the wealthy," the non-partisan Tax Policy Center has written. "In 2013, an estimated 94 percent of the tax benefit of low rates on capital gains will go to taxpayers with cash incomes over $200,000, and three-fourths of the benefits will accrue to millionaires."
A more recent Tax Policy Center analysis, of 2012 tax returns, shows how much more important capital income is for the very rich versus everyone else:
For most middle-class Americans, capital gains don't even register as a share of income. (That may be why Romney never got much traction with his plan to eliminate those taxes for people who earn up to $200,000 a year.) For Americans earning more than $500,000 a year, capital gains are a significant source of income. For those making more than $5 million, they're almost a majority of income.
Economists generally agree that reducing taxes on investment encourages investment. Many also agree that such reductions encourage wealthier taxpayers to shuffle their incomes into tax shelters, to reduce tax liability. The only way that makes sense as a sales pitch to the middle class is if you can argue that wealthy investors will plow their tax-free earnings back into the economy, creating growth and jobs.
Rubio may be a fresh face to make it, but for Republicans, that's a very familiar argument.