This week, Sens. Marco Rubio and Mike Lee introduced a GOP tax reform plan that could serve as a preview of Rubio's agenda if he makes a White House bid—but some conservatives already are skeptical.
For businesses, the plan would put the corporate tax rate at a single 25 percent rate and allow firms to deduct 100 percent of expenses, which the lawmakers say would account for the costs of capital investments the year they are made. Dividends and capital gains would not be taxed on the individual level, meaning any money made on many investments would not be subject to tax.
James Pethokoukis, a fellow at the conservative American Enterprise Institute, said while he is supportive of most of the plan, he thinks it could be difficult to sell to working families the idea that wealthy individuals would not have to pay individual capital gains taxes—even if it is more economically sound and the money still is taxed at the corporate level.
"A lot of people will see that as a throwback to the last campaign," Pethokoukis said, offering this example: How would people react to hearing that someone like Mitt Romney doesn't have to pay individual capital gains taxes?
He said because of the losses in revenue that would come from changes on both ends of the tax code, the proposal would need to be part of a larger plan to reduce the deficit—a plan that would include entitlement reform. "They need to explain how to pay for this or how it plays into entitlement economic reform," he said. "They need to explain how all of these pieces work together."