By Richard Rubin 

Republican presidential candidate Marco Rubio's tax plan would reduce federal revenue by $6.8 trillion over the next decade and deliver its biggest benefits to high-income households, according to a new analysis.

The Florida senator's proposal, fleshed out over the past year, would cut business-tax rates to 25%, let businesses write off capital expenses immediately, add a $2,500-per-child tax credit for individuals and eliminate taxes on capital gains, dividends and estates. The result would remove about $1 of every $6 the government is expected to collect, not including interest costs, according to the Tax Policy Center. That would make it difficult if not impossible for Mr. Rubio to meet his other goals of increasing military spending and balancing the federal budget.

"If the numbers added up, this would be a radical and innovative tax reform that would be worth taking seriously," said Len Burman, the center's director.

Mr. Rubio's plan attempts to fuse two disparate threads of Republican tax thinking. By offering the expanded child tax credit and a refundable credit to replace the standard deduction and personal exemption, he is aligning himself with so-called "reformicons" who have been urging the party to focus on pro-family policies. By ending capital-gains taxation and lowering marginal tax rates on businesses, Mr. Rubio aligns himself with supply-side economists.

In 2017, Mr. Rubio's proposal would give households an average tax cut of $3,146 and increase after-tax income by 4.4%. Taxpayers across the income spectrum would pay less to the government.

Those benefits aren't evenly spread, however. The top 1% of households, which would otherwise pay 28.2% of federal taxes, would get 33.8% of the tax cuts. The top 0.1% of households, which would otherwise pay 13.5% of taxes, would get 19.8% of the tax cuts, averaging more than $930,000.

For the top 1%, Mr. Rubio's plan would increase after-tax income by 10.4%. The bottom 20% would get a 1.9% boost.

By lowering tax rates and allowing immediate write-offs of capital expenses, Mr. Rubio's plans would make the effective tax rate on new investment near zero, Mr. Burman said. But, he warned, increasing federal deficits could lead to higher interest rates that could offset those benefits.

The center's estimates also assume that the Internal Revenue Service under Mr. Rubio would be able to police the boundaries between wage income taxed at 35%, business income taxed at 25% and capital gains that aren't taxed at all. Those differences, Mr. Burman said, "could create giant tax-sheltering opportunities" for people to recharacterize their income.

The Rubio campaign didn't respond Thursday to a request for comment.

The center, a nonpartisan project of the Brookings Institution and Urban Institute, used a bipartisan panel of reviewers for its study. Mr. Burman was a tax-policy official in the Treasury Department under President Bill Clinton. Mr. Rubio's campaign didn't answer questions from the center, so the analysis included assumptions about some details.

The center has already released analyses of the tax plans of Republican candidates Donald Trump and Jeb Bush. A study of Ted Cruz's plan is scheduled to be released next week, followed later in February by analyses of the Democratic candidates, Hillary Clinton and Bernie Sanders.

Write to Richard Rubin at richard.rubin@wsj.com

(END) Dow Jones Newswires

February 11, 2016 15:15 ET (20:15 GMT)