Here's what we know about the Republican tax reform plan so far

Key Points
  • Republicans plan to release an outline of their tax reform plan, featuring major reductions in individual and corporate tax rates.
  • President Trump and top GOP lawmakers are pushing for a tax system overhaul, promising to boost American economic growth.
  • Questions about the plan remain, including how Republicans will pay for the cuts.
Here's what we know about the Republican tax reform plan so far
Here's what we know about the Republican tax reform plan so far

Republicans plan to release an outline of their tax-reform plan this week, offering some of the first concrete details of a proposal they hope can accelerate American economic growth.

Six top White House officials and lawmakers have led the GOP proposal to overhaul the U.S. tax system. Republicans have set an ambitious goal to pass a bill before the end of the year to broadly chop tax rates and scrap most deductions.

"Republicans are going to announce bold tax reform that grows jobs, grows paychecks and vaults America into the lead," Rep. Kevin Brady, R-Texas, told CNBC on Monday. The chairman of the House Ways and Means Committee noted that the plan will offer specific numbers that include "the lowest rates on business in modern history."

The framework, expected to be released on Wednesday, will likely feature dramatically lower rates for most — if not all — households and businesses, according to several people familiar with the plans. However, as of Sunday night, the so-called Big Six had not yet finalized how much detail to provide on other key elements of tax reform, such as whether to allow full and immediate expensing and perhaps most critically, how to pay for the tax cuts.

'Big Six' tax plan awaits Trump approval
'Big Six' tax plan awaits Trump approval

Wednesday's announcement is not expected to include any provisions to raise revenue.

Some of the expected tax provisions include:

  • A Republican familiar with the White House plans confirmed negotiators are pursuing a corporate rate of 20 percent, despite President Donald Trump's suggestion Sunday afternoon that he would still prefer to see a 15 percent rate.
  • The framework would also set a slightly higher rate of 25 percent for "pass through" businesses, the person said.
  • The administration is also pushing for a top individual rate of 35 percent — the same number it proposed in a one-page outline of principles in April, according to the source. But there is not yet agreement among the negotiators over what the effective rate for the wealthiest households should be.

Republicans, who control the White House and both chambers of Congress, have promised dramatic changes to the tax system to boost the economy. Major tax reform is a complex process even for the majority GOP, as lawmakers navigate a web of state, local and corporate interests.

The Republican plan has come under heavy fire from Democrats for cutting taxes for the rich, and Trump himself has promised that any reforms would be focused on the middle class. Critics have also questioned how the plan will raise money to offset the cuts.

The GOP is expected to shift its focus to tax policy as the window to repeal and replace Obamacare in the Senate with only a majority vote winds down this week.

Members of the House Ways and Means Committee — the top House tax-writing panel — held a retreat Monday ahead of the expected rollout. Committee Democrats were not invited, CNBC confirmed.

On Monday night, Trump will also have dinner with conservatives, where they are expected to discuss tax reform. Members of the Trump administration are expected to attend a House GOP half-day retreat on Wednesday, CNBC confirmed.

Trump is also slated to make a speech pushing for tax reform on Wednesday.