President Trump and the entire GOP are proposing a tax reform that is expected to vary dramatically from the status quo. The plan consists of three fiscal tenets: repealing the estate tax, reducing individual income tax, and slashing corporate tax rates.  This week President Trump compared his plan to the current system saying, “The current tax system is a colossal barrier standing in the way of America’s economic comeback.”

While President Trump has been touting his tax plan as a boon for the middle class, the nonpartisan tax policy center has stated otherwise, claiming that the plan would instead serve as an immense boon for America’s wealthiest.

The think tank analysed the tax plan outlined by the “Big Six,” a band of Republican legislators and officials. The plan makes broad claims about increasing the child tax credit and reducing individual income tax rates, but it lacks definite numbers that could drastically affect the plan’s fiscal consequences. The plan also calls for the repeal of state and local tax deductions, which could raise taxes for over a third of the taxpayers who earn $150,000 to $300,000.

Although its effects on individuals are unclear, one thing is certain: the plan will  help America’s companies and corporations, with a $2.6 trillion in business tax cuts.

The new reform will reduce corporate tax rates from 35% to 20% and small business tax rates from 39.6% to 25%, leaving many to worry about the implications of such a large cut. The plan is estimated to cost the federal government $1.5 trillion overall over the next decade, but President Trump claims that these costs will be covered by the increasing in economic growth, an idea once derided by President George H.W. Bush as “voodoo economics.”

Currently, the plan only exists as an outline by Republican administration officials and has yet to be introduced to the House. The plan is expected to meet considerable resistance by congressional Democrats and has a long path ahead to becoming the law of the land.

Sources: New York Times, Tax Policy Center, BBC, POLITICO, Market Watch

Photo Source: White House/ D. Myles Cullen CC BY 3.0 US