Photo: Getty Images

America’s tax code is bloated and in need of serious reform. Sens. Mike Lee (R-UT) and Marco Rubio (R-FL) may have one solution.

Their new tax proposal would simplify the tax code and help grow the economy, say Heritage Foundation economists David Burton and Curtis Dubay in a new report.

The Lee-Rubio plan would streamline the way businesses are taxed, cutting down the unwieldy seven-bracket system and replacing the process of taxing depreciation with a more straightforward method based on expenses. These and other provisions would modernize the tax code and grow the economy. But there is room for improvement on individual income taxes:

The business side of the Lee–Rubio plan is the best business income tax reform plan that has been proposed in Congress in recent memory. The individual side is a modest step in the right direction, but leaves much room for improvement. The business tax reforms are so positive that, taken as a whole, the plan would dramatically improve the economy and the incomes of American families.

Burton and Dubay also note that their analysis could change when Lee and Rubio release their full plan.

What do you think about the Lee-Rubio tax plan? Tell us in the comments below.

Comments (88)

Tom Kohls - March 12, 2015

Spending needs to be addressed first. Evade the real issue by addressing others. Yes we need to get the economy going so we can reduce the entilement culuture. What does it take 18,25,30 trillion? What will destroy our country first? Tax laws? Give me a break.

Wayne Peterkin - March 12, 2015

I am a strong advocate for the Fair Tax which I believe to be the biggest economic stimulus ever conceived while being fair to every business and consumer.

susan kallander - March 12, 2015

Get rid of the IRS and have a flat tax. That eliminates the ridiculous power and corruption of that ‘service’.

Leslie Rubin - March 12, 2015

the plan is an improvement, but the best plan I have ever seen is the Fair Tax, HR 25 in the house. It eliminates the IRS and simplifies everything, and places zero burden on the lowest level of income, not even social security tax!

Randy Chopp - March 12, 2015

The plan is not near enough to solve the problems. Eliminate all subsidies, loopholes, tax breaks and exempt status. Eliminate credits, etc. No one gets any free tax ride, Period! It would be best to allow individuals to prove how much of what they earn is used for living expenses. What is left, would be taxable income. Flat 19%. Businesses, prove profit, deduct capital expenses, R&D, what is left, is taxable income. 20%. Eliminate Baseline budgeting. Cap the Tax rate at 20% of GDP. Pass balanced budget ammendment, with Jailtime for failing to pass a budget.

Jim Garcia - March 12, 2015

The only tax plan I support is the Fair Tax Plan.

Steve Johnson - March 12, 2015

We already have a great plan that is based on consumption, not income, and it is called the Fair Tax. The greatest benefit in my opinion would be to prevent politicians of using the tax code to purchase votes which would help reduce corruption in our government. It would also eliminate the most corrupt department in our government, the IRS..

William Kurtz - March 12, 2015

Fair tax needs to be enacted to boost the economy….

Margaret A. Boyer - March 12, 2015

No…spending needs should not come first.
But in order to ralley the dems, Lee & Rubio’s tax reform needs to include the (individual) or
middle class AS MUCH as budiness, or I would expect it to fail.

Sylvia Berggren - March 12, 2015

Excellent idea. STOP OBAMA

Richard eckelhofer - March 12, 2015

Cannot not comment . Have not read it. I have a lot of respect for these two men.

Ward Rowley - March 12, 2015

The most uncomplicated tax reform would be the establishment of a national sales tax which would replace ALL taxes on income. It would also solve the problem of undeclared income by many small businesses and contractors. If people should wish to purchase yachts and expensive cars then they would simply pay the sales tax on such luxuries. No more concerns about the IRS or meeting the deadline for filing every April. This is truly a fair tax!

doug rogers - March 12, 2015

If a flat tax will work , do it..

Raymond A. Howard - March 12, 2015

let Lee-Rubio,lead on tax reform and the clean up of the IRS.

Lloyd Carter - March 12, 2015

The IRS and Congress are two sides of the same coin, a bloated tax system. Crony-Capitalism has prevented any relief to the American taxpayer. A National Sales Tax works for me.

Robert Winters - March 12, 2015

America’s tax code is bloated and in need of serious reform. NO DOUBT ABOUT THAT.
Sens. Mike Lee (R-UT) and Marco Rubio (R-FL) may have one solution. THIS IS NOT A REAL SOLUTION, IT IS JUST TINKERING WITH THE INCOME TAX CODE WHICH SHOULD BE DONE AWAY WITH BY PASSING THE FAIRTAX(HR25/S155) AND CLOSING THE IRS. STOP TAXING WORK AND PRODUCTIVITY AND TAX SPENDING.

Their new tax proposal would simplify the tax code and help grow the economy, say Heritage Foundation economists David Burton and Curtis Dubay in a new report. BUT NOT AS MUCH AS THE FAIRTAX.

The Lee-Rubio plan would streamline the way businesses are taxed, cutting down the unwieldy seven-bracket system and replacing the process of taxing depreciation with a more straightforward method based on expenses. These and other provisions would modernize the tax code and grow the economy. THE FAIRTAX WOULD ELIMINATE CORPORATE INCOME TAXES ALTOGETHER, MAKING THE U.S. ECONOMY THE STRONGEST BY FAR IN THE WORLD AND IT WOULD MAKE AMERICAN COMPANIES THE MOST COMPETITIVE ON THE GLOBE.

The business side of the Lee–Rubio plan is the best business income tax reform plan that has been proposed in Congress in recent memory, BUT THE FAIRTAX IS THE MOST THOROUGHLY WRITTEN AND RESEARCHED PROPOSAL AND IT IS PRESENTLY AWAITING HEARING IN THE HOUSE WAYS & MEANS COMMITTEE.
The individual side is a modest step in the right direction, but leaves much room for improvement. FOR INDIVIDUALS THE FAIRTAX ELIMINATES ALL FEDERAL INCOME AND EXCISE TAXES. WHAT COULD BE BETTER THAN THAT?
The business tax reforms are so positive that, taken as a whole, the plan would dramatically improve the economy and the incomes of American families, BUT NOT AS MUCH AS THE FAIRTAX WOULD.
Lee and Rubio have yet to release their full plan, BUT THE COMPLETE FAIRTAX PLAN IS AWAITING A VOTE.so Burton and Dubay may update their analysis upon the launch. LETS SEE ANALYSIS OF THE FAIRTAX BY BURTON AND DUBAY.

John Holden - March 12, 2015

Why not drop the complexity and replace with a national sales tax that excludes basic essentials. Then all those who do their own taxes could be free to do positive work instead.

Rachel Verdon - March 12, 2015

Tweaking the tax code is not going to work. The Lee-Rubio does not abolish the problem of tax code complexity.

“Lee–Rubio scraps depreciation in favor of expensing and would therefore reduce the cost of capital, substantially increase the capital stock, improve productivity, and further enhance job creation and wage growth.” This does not go far enough.

The real problem began in the Nixon Administration switching from Cost Based accounting to Value Based estimates, both by the IRS and the corporate community. This is fuzzy math, where CEO Harvey Kapnick of Arthur Andersen openly championed businesses keeping two sets of books, one for the tax collectors and one for Wall Street’s rosy prospectus.

Fuzzy Math still rules. Let’s abolish the 74,000 page tax code and replace it with a simple Flat Tax, avoiding all the laws and loopholes. Simplicity breeds honesty and more tax revenue.

No matter how we plot to grow the tax base and tax revenue, it is an exercise in futility when Congress will spend it instantly, allowing the government to grow in its size and girth.

We need a Balanced Budget Amendment to the Constitution. Please look up the Convention of States and help this Balanced Budget Amendment limit the size and scope of the federal government.

mike hayek - March 12, 2015

A flat tax won’t work. The IRS would still be there. Our present system started as a flat tax on only rich and look what happened. Repeal the 16th amendment, get rid of IRS, take the power away from the government and give people their freedom and liberty back. The FairTax will do that. If the politicians don’t like it, then it must be good for the rest of us. This is the most conservative option out there and I wonder why Heritage does not more openly back it.

Marlrene Angelo - March 12, 2015

Plan is step in right direction. I prefer the FairTax but maybe they will come to agree that is best> HR25.

John Barker - March 12, 2015

The tax laws need to be simplified for individual returns. Tax laws need to be designed to meet definite needs rather than what may influence political favoritism.

Marilyn Buchanan - March 12, 2015

I am a believer in The Fair Tax and would like to see it enacted and want it to get a fair vote. I don’t know if this plan of R union gets rid of the unrighteousness IRS.

Charles R Wright - March 12, 2015

The Lord God in the Holy scriptures commanded a ten percent ‘tithe’ for His people since the time of Moses, if not before. That’s simple enough… oh, there no deductibles… even the poor pay their ten-percent. Now that’s a plan where everyone pays equally… what a plan Congress! Oh yes, the Lord blesses the full tithe payers and so could our Christian majority nation paying a ten percent income tax, no deductibles.

Al from Fl - March 12, 2015

Need a Fair Tax or a Flat Tax with no deductions (to eliminate lobbyists & eliminate IRS). Addressing business side is good but we need to balance budget by cutting spending & reforming the entitlements.

William Bennett - March 12, 2015

First of all, the federal budget needs balanced. After that we should deal with a fair tax for EVERY citizen.

Charles Stone - March 12, 2015

While the efforts to streamline tax policy presented by Lee-Rubio plan are good steps, we already have a viable solution with the FAIR TAX (HR25/S155) bill.
Debate it’s merits and solutions (without passage) during this pre-election Congressional term so that the next Presidential election is a referendum on the implementation of this tax solution.
Rally all non-liberals/statists for sweeping tax change!

James Ord - March 12, 2015

I doubt this will ever happen. There is too much political benefit from a corrupted/perverted tax system.

Robbie Nichols - March 12, 2015

Why can’t we have a Fair Tax….that has one tax bracket for all wage earners. 15% of 40,000 income is not that much, but 15% of 200,000 is much more. Why do we penalize the higher earners. Why can’t we all be treated the same when it comes to taxes?

Ronald Mabe - March 12, 2015

It is a start but now is the time to go all the way with a flat tax. We should use the Holly book for guidance and give no more than tidings to the church, 10%.

Pat Plesh - March 12, 2015

In my opinion the IRS must be abolished since we have learned it can be used for political power which never should have happened. In light of that only the FAIR Tax can be fair since it is a consumption tax that everyone including Illegals and tourists will pay. There will be no need for any oversight of any fed govt bureaucracy – thank God! Let the states determine the corporate tax in each state and keep the fed govt OUT! We are so sickened by the corruption and pressure by lobbyists etc so only ENUMERATED POWERS FOR THE FEDS!

Ron - March 12, 2015

This proposal is just another band aid for a very bad system that would leave major wounds untreated. There is no better solution for Income Tax reform than the FairTax. It does away with the IRS goons, all the regulations, removes lobbyists from our political system and substitutes an easily followed, fair tax system that gives adequate revenue and allows for help to those who genuinely need breaks. I am surprised that Heritage is not behind it!

Gayle Sharp - March 12, 2015

Eliminate the IRS and establish the Fair Tax. Balance the budget. Stop birthright citizenship for babies of illegals and visitors.

Hugh Campbell - March 12, 2015

No tax plan will fix our problems if we don’t stop spending. Then get rid of the IRS and establish a max 10% tax from the citizenry and live with that. Anything more must be approved by the people for a vote.

William Myers - March 12, 2015

Don’t agree with the personal income 15% tax rate proposed. As a retired person we live off of SS, a small fixed pension, and my savings IRA. My average income tax rate is about 8%. The idea of 2X the amount of income tax to 15% would require us to reduce our already tight spending budget considerably. Car has over 160k miles and seniors don’t get food stamps.

tina - March 12, 2015

Our country needs money to: operate the military, border protection, maintain national roadway and railway system and a few other essential services. First need to trim the government fat. Then all adult working citizens should pay a small percentage like 5 or 7 %. USA legislators would be paid by their states a reasonable stipend.

Rea Stoll - March 12, 2015

I saw a brief description of the plan made by Lee and Rubio themselves. It is the most pratical solution to our totally unreadable tax code that I have seen–simply and lacking in practices that favor one group at the expense of the others.\\

James Wooster - March 12, 2015

This would be a good first step. If it does indeed reduce or take away power from the Draconian IRS, I am all for it! However, even with a ‘flat tax’ code, the forms would still be complicated, since more sophisticated earners would still have to list their various sources of income and associated costs of doing business. I am more interested in the following when it comes to our government: (1) reduce the power of the IRS, (2) stop spending us into oblivion, and (3) stop borrowing! Tax reform is nice, but I think it is trumped by the bigger problems of (2) and (3) above.

sam - March 12, 2015

” When there are no bones anybody can carve a goose”. “rights talk is as malleable as cost benefit analysis”

Ann Hilburn - March 12, 2015

The IRS is so corrupt and inept that I don’t recommend anything to try to “fix” it. I am for the Fair Tax and getting rid of the IRS.

Jane Rice - March 12, 2015

I agree with others that the best tax plan is to rid this country of the IRS and install the fair tax, or the straight sales tax, so that people don’t have to spend their savings to pay the government.

Michael McCown - March 12, 2015

Tax changes are definitely needed along with serious limits on our current government spending. Budgets should be reduced not increased. These Tax proposals would be great but spending must be curtailed also.

William Kolb - March 12, 2015

Flat tax (state and Fed.) 10% each. Large ticket items would be taxed well below 10%. Tiny FEDS / reasonable sized State.

Angie Anderson - March 12, 2015

No tax is fair! I have reservations about Marco Rubio after his Gang of 8 affiliation so I am hopeful and watchful.

Cynthia DeRouen - March 12, 2015

I don’t see this as a solution. Just more rules and regulations to add to the already burgeoning tax code. The only sane solution is abolish the IRS, and pick either fair tax or flat tax, PERIOD!

Carol - March 12, 2015

Their tax reform proposal sounds very good, but a flat tax, with elimination of the IRS, would be MUCH BETTER!

Chantal - March 12, 2015

God picked the right young men to counteract the insanities reigning in our world today, Go young Rubio this is
your world to take over to be saved !

Michael Smith - March 12, 2015

Simplify, simplify, simplify!

Penny Teague - March 13, 2015

Good start!!

Adele Shafferman - March 13, 2015

To get rid of the IRS, and truly reform our tax system, we must use the Fair Tax, a plan that has been examined and developed over a period of three years. As long as we continue to “reform” the present system, it can lapse back I to the mess we have now.

Richard Heidorn - March 13, 2015

Good but a simple flat tax and no IRS would be better.

Larry Wilkins - March 13, 2015

We definitely need tax reform for the individual and business. There are always tax reform proposals being made but very seldom are any major reforms instituted. There is too much politics involved. I am not holding my breath that anything will get done. It is voicing to the constituents what the politicians know they want to hear and then they will do nothing so they don’t rock the boat.

Larry Haynes - March 13, 2015

Yes, we certainly need tax reform and the single best plan I have seen is the FairTax. It not only fixes the tax problem, but it also gets rid of the iRS which has shown itself to be a political enforcement agency for a would-be despot.

Jack Horsley - March 13, 2015

YES, LONG OVERDUE. WILL FINALLY CREATE A BASIC LEVEL PLAYING FIELD: CURTAIL IRS, REMOVE THE ENORMOUS EFFECT OF LOBBYISTS,
AND EVERYONE WILL BECOME A PARTNER IN THE UNITED STATES.
STOP THE TINKERING AND PANDERING TO SPECIAL INTERESTS.

Jean Beenken - March 13, 2015

We need either a flat tax or Fair tax. Get rid of the current tax system which only leads to more corruption in our so-called government and of course get rid of the hated IRS!!

steven m flanagan - March 13, 2015

Get rid of the IRS..Go to a Flat tax,period

Pauline Blanka - March 13, 2015

A step in the right direction. I also would like to get rid of the IRS and their power. A flat tax or a consumption tax. Anything but what we have now.

david dombrosky - March 13, 2015

Get that tax monster off of the retired folks backs !!!!!! We paid our dues all of our life and now is the time for us to enjoy what we earned now that we have time to spend some of it. Give us a break damn it !!!!!!!!!!!!!!!!!!!!!!!!!

T J Howard - March 13, 2015

Since corporations do not really pay tax, eliminate the corporate tax That would stop double tax on dividends. Last step- Fair Tax

David Barbour - March 13, 2015

Keep it simple. I favor the Fair Tax solution.

george bisbano - March 13, 2015

An important step in the correct direction to improve our economy and generate jobs that will add to tax revenue as famously said by John F. Kennedy in 1962. He recommended tax reduction to spur growth and to create jobs. His legacy was by cutting tax rates, 13.9 Million jobs were created and tax revenues increased 50%.

Don F. Tibbs - March 13, 2015

The Lee – Rubio tax plan is a good start but does not get the job done as far as our economy and the corrupt IRS is concerned. The Fair Tax is the only plan that addresses both while taking power over the people from the government and placing the power in the hands of the people where it belongs.

Linda Kirker - March 13, 2015

I am in favor of eliminating several government depts. including the IRS, DOE and ANR. If a Fair or Flat tax works, great! We also need not Free trade, but Fair trade. Of primary importance is border security and debt reduction while stimulating the economy and reducing spending.

Gene Blazer - March 13, 2015

Simplifying the tax code is all well and good – regardless of who is behind it; but, why try to fix a giant money eating faction of the Federal Government when a fair/flat tax would be better. We can’t seem to curb illegals or let me rephrase: we don’t have the appetite to stop illegals from coming into this country – therefore, some other form of taxation could fund the Fed and insure that everyone who spends a dime in America will have skin in the game. What, pray tell, would be wrong with that?

Roger Wycklendt - March 13, 2015

A simple flat tax, or similar hybrid, is long over due. Flat taxation promotes a free market place, which is gives more people opportunities to improve their situation. For those on the left who speak of “fairness”, this is the fair solution.

Roger Wycklendt - March 13, 2015

A flat tax promotes a free market place. That is a great way give those needing employment the opportunity to improve their situation.
For the left of center folks looking for “fairness”, this is a great solution.

Barbara Norton - March 13, 2015

This sounds like a small step in the right direction. What we really need is a complete reboot. Get rid of the entire tax code and the IRS which is now acting like the secret enforcement police for the white house. The federal government is now collecting more tax money than ever before and it still isn’t enough for them. Go to a simple fair or flat tax and start major cuts in spending.

Mary Sherigan - March 13, 2015

YES IT’S A START. ONCE AGAIN YOU HAVE TO KEEP TALKING ABOUT THIS PLAN ARTICLES IN THE NEWS PAPERS, INTERNET AD’S, ANY FORM OF MEDIA TO GET THE MESSAGE OUT TO THE PEOPLE . I DRIVE THE EXPRESSWAY AND SEE BILLBOARDS PUSHING OBAMA’S AGENDA..HELP.

Alan Jones - March 14, 2015

Stop dickering with tax rates.
Abolish the Income tax and replace it with a tax on consumption, not production. Create a federal sales tax, collected by the States, with details prescribed by Congress. No more IRS!

Russ Larson - March 14, 2015

This plan sounds pretty good but, any tax on business is still a hidden tax on the people that buys their goods or services. All of the money that they get that pays for overhead and taxes comes from their sales. The best plan for business would be The Fair Tax. The Fair Tax also gets rid of the 16th amendment and the IRS (YEA).

Reverend Lydia Lynne C. Fuller (Mrs. Charles H. Fuller)) - March 14, 2015

What do you think about the Lee-Rubio tax plan? Tell us in the comments below. I think it is a great start and would improve the “Free Enterprise System (Capitalism) with a Conscience”; however, when the businesses are helped by their plan, tax reform should not stop. The way individual citizens are taxed needs a major overhaul to include all Americans such as a flat and/or portions of the fair tax looked into to bring about tax reform. The tax forms should be greatly simplified so that a third grader could fill them out properly. The IRS should be overhauled, more closely monitored, held accountable, or completely abolished for a smaller, government entity collecting tax monies.

william - March 14, 2015

going the right direction!

Allen Burt - March 14, 2015

I am in favor of a FLAT TAX for individuals and corporations. Eliminate the complex tax code and 99 percent of the IRS!!

William Reister - March 14, 2015

Any “tax reform” plan which leaves the Federal Government with the authority (16th Amendment) and ability (the IRS) to routinely demand intimate details of every working person’s financial transactions without a warrant is utterly unacceptable to the principles of a free society.
You cannot kill the monster by feeding it. End it, and let freedom ring.

Charles Rolfes - March 14, 2015

I wish them well but every time the tax code is made simple by the time it goes thru congress it gets more complicated , next thing you know we will have eight leveles of taxation so I hope them well.

Ken Cooksey - March 15, 2015

I would perfer the FairTax. It is the most researched income tax proposal yet put forth. The poloticians hate it because it takes away their power to tax the citizens.
Read the books that have been written about the FairTax.

anne brown - March 15, 2015

A flat tax is best for the individual. Thanks to Mike Lee for at least addressing the situation.

Kent Swanson - March 16, 2015

I don’t know enough about the contents of the Rubio tax plan to make an educated comment. After they provide their plan to the public, I would like to read it and form an opinion based on knowledge of the details.

David Goza - March 16, 2015

Talk, Talk….Sounds like a plan. Plan, Plan, Plan. Stop talking and planning and proposing and do something finally!

Bill Bates - March 16, 2015

We need across the board tax reform. Not just taxes on business (horribly needed), but the fair tax for all the rest of us. Government needs to learn to live within their budget. No more “it’s a cut” when the rate of growth doesn’t go up; but a REAL cut in government spending.
Except Defense: the world is getting far scarier than it has been since the end of the Cold War. We need to get rid of the sequester for Defense. Start enlarging the Air Force and Navy to defend the USA and Europe against Russia and wipe ISIS off the map.

Terry Beets - March 16, 2015

Taxes should be a simple and fair method to pay for the cost of running the government. The first step is to quit using taxes as economic incentives!!
For individuals, implement a flat tax with an individual exemption (i.e. 10% tax on income over $10,000). No deductions or credits – except for medical expenses over some threshold.
For businesses, tax cash flow. Subtract expenses from income and tax the difference. ( 25% is way too high, more like 10%). Again, no tax incentives!!! And stay away from the obscenely complicated accounting practices.

Parker Freeland - March 17, 2015

Agree, agree, agree!

Jane Gill - March 25, 2015

It’s time for common sense in our tax laws.

lonnie a. summy - April 17, 2015

The only fair tax is a sales tax. Users pay. Get rid of the IRS!!! The leadership of this country, conservative and liberal, have no idea what is constitutional anymore, and that includes the supreme court.

Karen Miller - April 17, 2015

Let us start by eliminating the IRS. The government is to be reporting to the People; not the People reporting to the government. The government knows more about us than our friends.

Harold Blood - April 17, 2015

I am not for reform but replacement. either the fair or flat tax . Time to take lobbyist out of our tax code.

Andrew Baldridge - April 17, 2015

I could do as well, I see nothing here that amounts to a hill of beans!

Dave Bleacher - April 17, 2015

Why s—- around adding more pages to the 26,000 page abortion of a Tax Code – just pass the FAIRTAX.

Harold Kelley - April 17, 2015

I’m nervous about any tax change. They always end up being higher than before. Wasn’t the original IRS tax set at about 2 or 3 percent?

Leave a Reply

Your email address will not be published. Required fields are marked *