printA tax cut is a reduction in tax rates. It means letting a poor sod (or serf) keep more of his rightful earnings. A tax credits is social tinkering or engineering such that certain politically desirable constituents benefit to the detriment of others. Not surprisingly, the latter is what Republican Marco Rubio proposes. Via the Wall Street Journal (ignore the WSJ’s praise for Rubio’s foreign policy belligerence; it ought to be obvious that I don’t care for the praise or the Rubio impetus):
… His recently announced tax-reform plan, introduced with Utah’s Senator Mike Lee, reflects the tensions inside the GOP. It proposes dropping the corporate rate to 25%, a consensus figure. But it proposes remarkably timid reductions in marginal tax rates for individuals, leaving the top rate at 35% on relatively modest incomes. Instead the plan’s centerpiece is a large, new tax credit—$2,500 per child.
With this proposal, Senator Rubio makes himself the party’s most visible ally of the “new” Republican idea that the Reagan tax-cutting agenda is a political dead end, and that the party now must redistribute revenue directly to middle-class families. It’s not clear how Candidate Rubio would hope to win a tax-credit bidding war with Hillary Clinton, who’d see and raise on the size of the credit and make it refundable to non-taxpayers. The Rubio tax credit looks like an obvious political gambit with no economic growth payoff. …