President Trump announced his new tax proposal on Wednesday. The plan’s goals include “tax relief for middle-class families” and small businesses, removing incentives to ship jobs overseas, broadening the tax base to draw income from a larger cross-section of society, and simplifying the process of filing taxes.
Highlights of the plan include doubling the standard deduction, which means that more of a taxpayer’s income would be set aside untaxed, regardless of any other deductions, and eliminating the estate tax. The plan also lowers tax rates for both small and large corporations while simultaneously reducing the number of deductions available to them. Taken as a whole, the plan reduces tax income, but does not explicitly replace the lost revenue.
The plan is typical of Republican efforts at tax reform, arguing that reduced rates of taxation on wealthy people and large corporations will be made up for in increased economic growth, closed tax loopholes, and a broader taxation base. The bill, however, seems to primarily benefit the very wealthy, including President Trump.
The plan is both vague and not yet scored by the Congressional Budget Office, so it is difficult to predict its precise effects.