As President Donald Trump laid out the bare-bones outline of his new tax plan Wednesday, even with scant details it became clear that if Congress were to pass it, the changes would make a huge difference in how the average American pays their taxes--and represent the first big change to the U.S. tax code since Reagan was president in 1986.
A repeated theme, which builds on one of the President's campaign promises, was the simplification of tax paperwork to a single page or less. This would be a major turnaround from the current code, which takes up more than 11 Bibles' worth of paper.
Trump's speech, given to a receptive crowd in Indiana, provided few details on the specifics of his plan. He did, however, refer to the proposal as a "middle class miracle," berating the state's Democratic Senator, Joe Donnelly, from the stage in an attempt to gain some bipartisan support.
"If Senator Donnelly doesn't approve it -- because you know he's on the other side -- we will come here and we will campaign against him like you wouldn't believe," he said. "Democrats and Republicans in Congress should come together, finally, to deliver this giant win for the American people."
For the time being, Trump says the proposal entails a rollback of reductions and credits in favor of doubling of the standard deduction--to $12,000 for single individuals and $24,000 for families--and a reduction in the number of tax brackets from seven to three, including 12, 25 and 35 percent brackets.
It's hard to tell exactly who will benefit, University of St. Thomas finance Professor John Spry says, though it seems like the majority of people would see a tax cut under the president's plan. On the other hand, it's not difficult to envision a situation where, with many deductions gone, the amount of tax credits lost outweighs the rise in a person's standard deduction.
At any rate, Spry says the proper way to look at the proposal is like a Monet painting: best viewed from far away, without being able to see the fine brush strokes of the policy.
"It’s like an impressionist painting," he said. "You can’t really see the fine details of exactly when do the new 12, 25 and 35 percent tax brackets kick in. You can't see the vivid colors that there are in three tax brackets--and that’s a big reduction in the number of brackets--but you can’t really see the details.”