Can Republicans reclaim the political high ground on taxes?

Republicans have been grappling with how to replace Ronald Reagan’s 35 year-old conservative clarion call for lower taxes without abandoning the economic principles that undergird the policy and helped the GOP win quite a few elections before the message grew stale and ran out of steam in the 2012 presidential contest.

Reagan won the presidency in part by promising to take a machete to marginal income tax rates for rich and poor alike, and succeeded, reducing the rate on top earners from 70 percent to 28 percent. This week, two Republican senators who were 10 years old when Reagan pulled that off took a stab at updating his iconic policy and the message that carried it.

The comprehensive tax overhaul pitched by Utah’s Lee and Florida’s Rubio, a potential presidential candidate, triggered what is sure to be a lengthy policy debate. But just as significant were the plan’s political implications. The Generation X senators are attempting to recast a 1980s Republican pillar with policies and messaging better suited to the political and economic circumstances of 2016.

“What Lee and Rubio have proposed here is striking,” said Rick Wilson, a Republican political consultant based in Florida. “It directly addresses a lot of the very fundamental, middle-class concerns that the tax code is full of provisions for the connected and powerful, and has become the driving engine of a crony capitalist economy.”

Reagan took office at a time when taxes and big government had been on the march for half a century. The former California governor’s proposals to slash corporate and personal taxes were considered radical by some, but the ideas felt fresh. More than three decades later, supporting lower taxes and opposing any increases are still prerequisites for winning a Republican primary, particularly for nomination to the presidency or a seat in Congress.

But the policies are no longer bullet-proof or inspiring. Democrats have been successful at demonizing tax cuts as a giveaway to the rich at the expense of the middle class, while even Tea Party conservatives who support limited government and loath the Internal Revenue Service wonder what’s in it for them. In the midst of a slowly recovering economy, many Americans view the tax code as rigged toward moneyed interests.

It is these views of taxes and Republican tax policy that Lee and Rubio appear intent on blunting with their proposal. The senators’ plan addresses corporate and personal taxes. But during a news conference on Wednesday, they emphasized the benefits to middle class families and concerns about wage stagnation and income inequality. Predictably, Democrats attacked the plan as “trickle down” economics that will only help people at the top.

“We started this effort with a distinct set of goals,” Lee said. “We wanted to treat all families equitably and eliminate the tax code’s biases against parents and against people who choose to get married; to encourage economic growth that will yield more private sector jobs and result in higher wages — to remove cronyist privilege within the tax code.”

“We have to confront these 21st Century challenges with 21st Century solutions,” Rubio added.

Lee-Rubio would institute just two brackets, setting up a 15 percent tax rate for people earning up to $75,000 or married couples making up to $150,000, and a 35 percent top rate for everyone above that line. The current top rate is 39.6 percent.

Taxes on capital gains, dividends and estates, which tend to impact wealthier earners, would be eliminated. But the plan would pare back many of the individual deductions enjoyed by the wealthy, leaving only the mortgage interest and charitable contribution deductions. It also would implement a new $2,500 per-child tax credit, applicable whether a parent makes enough to pay income taxes or only gets hit with payroll taxes.

The plan’s political viability on Capitol Hill is questionable. President Obama opposes lowering taxes on higher earners and Senate Democrats would probably filibuster it. Meanwhile, House Republicans are developing plans of their own, led by Ways and Means Committee Chairman Paul Ryan of Wisconsin. The looming presidential campaign only further complicates the prospects of moving tax reform legislation this year or next.

As a broader political exercise, however, Lee-Rubio is important for the Republicans as they seek to make conservative principles relevant to a new generation of voters and others looking for solutions to modern problems.

Grover Norquist, president of Americans for Tax Reform and keeper of the Taxpayer Protection Pledge that most Republican candidates sign vowing never to support tax hikes, said in a recent interview that it is important for the GOP to keep up with the times and speak to the tax issues voters are dealing with today.

For example, Norquist said, in the Reagan era, things like high income and property taxes piqued voters; in 2015 it might be Obamacare taxes and other levies passed by Washington and state and local governments.

“You ask people: ‘So which taxes bother you?'” Norquist said. “The tax issue will always be a central issue because it’s the first time you meet the government.”

Joseph Lawler contributed to this report.