Trump administration officials and congressional Republican leaders are negotiating the terms of a tax reform bill. While they have not settled on a plan, here's what we know about their goals and intentions.
The GOP vision tax reform consists of two parts: The first is lowering tax rates and eliminating taxes. That leads to lower tax revenue. The second part is eliminating tax breaks, which raises revenue.
Tax cuts
Lowering the corporate tax rate
THE PLAN: Under current law, the corporate tax rate is 35 percent, the highest among rich countries.
President Trump has called for lowering it to 15 percent. House Republicans have set a goal of 20 percent.
WHO BENEFITS: Economists disagree about whether corporate tax cuts mostly benefit shareholders or workers. Treasury Secretary Steven Mnuchin has said that 70 percent of the corporate tax cut would flow to workers, a claim with some support in research by scholars at the American Enterprise Institute. The Congressional Budget Office, however, assumes that only 25 percent of the corporate income tax falls to workers. And some of those workers are executives and other highly paid people. Overall, the budget office estimated that about half of corporate taxes were borne by the top 1 percent of income earners in 2013.
THE COST: Trump's version of the corporate tax cut would lower revenue by about $2.3 trillion*.
The GOP vision tax reform consists of two parts: The first is lowering tax rates and eliminating taxes. That leads to lower tax revenue. The second part is eliminating tax breaks, which raises revenue.
Tax cuts
Lowering the corporate tax rate
THE PLAN: Under current law, the corporate tax rate is 35 percent, the highest among rich countries.
President Trump has called for lowering it to 15 percent. House Republicans have set a goal of 20 percent.
WHO BENEFITS: Economists disagree about whether corporate tax cuts mostly benefit shareholders or workers. Treasury Secretary Steven Mnuchin has said that 70 percent of the corporate tax cut would flow to workers, a claim with some support in research by scholars at the American Enterprise Institute. The Congressional Budget Office, however, assumes that only 25 percent of the corporate income tax falls to workers. And some of those workers are executives and other highly paid people. Overall, the budget office estimated that about half of corporate taxes were borne by the top 1 percent of income earners in 2013.
THE COST: Trump's version of the corporate tax cut would lower revenue by about $2.3 trillion*.