Republicans are pushing for tax reform, and everyone in legislature is trying to decide what the best plan is moving forward.

The GOP is hoping to cut taxes to increase revenue and help the middle class, but economist and Kent State professor C. Lockwood Reynolds said this is almost impossible.

“The vast majority of economists will tell you (that) you can’t cut taxes enough to get enough revenue to see growth,” Reynolds said. “If you cut taxes by 4 percent, the economy is not going to grow by 4 percent to offset it.” 

However, Republicans are still confident the majority will benefit.

“It’s very complicated,” Treasury Secretary Steven Mnuchin said. “By simplifying the code and putting everybody on a level playing field, we’ve literally run hundreds, if not thousands, of examples within Treasury. For most people — and again, it may not be 100 percent — but by far the majority, both the House and Senate version provides middle income tax relief.”

Mnuchin went on to say that by reducing the tax rates, it will bring trillions of dollars back on shore and will create an economic boom in the United States.

Key Points of the GOP Tax Reform

One of the biggest points from the tax plan is taking the current seven tax-bracket system and turning it into a four tax-bracket system. Based on annual income, more people will have to pay similar income tax rates. The system will look like this:

The new tax reform will also double the standard deduction, which is the amount everyone can deduct from their taxable income. Right now, the money paid toward local and state taxes can be taken out of a person’s federal income tax, but the new reform will do away with this system.

Reynolds said this hurts people who live in higher-taxed states and even lower-taxed states. This will take the current deduction rate of $6,000 to $12,000 for single people and $24,000 for married couples.

Another complicated component of the tax reform is the corporate tax rate. The rate will be cut from 35 percent to 20 percent, meaning large corporations will see more money in their pockets.

“If you cut corporate taxes, it’s going to benefit people who have corporate income, who own shares and stocks and things like that, which tend to be the wealthier,” Reynolds said.

Democrats in the Senate argue that the tax reform will only benefit the wealthy.

“We know that the wealthiest Americans are going to get a definite, long-term, permanent tax break,” said Senator Dick Durbin of Illinois. “Under both plans (the House and the Senate), the state tax and the alternative minimum tax and the taxes that affect the wealthiest people will be permanently reduced. When it comes to working families, it’s a mixed bag.”

Republicans have accepted a $1.5 trillion spike in the nation’s deficit, and no matter what the GOP decides, Reynolds is confident that the United States will be racking up more debt.

“There is this problem where all the math suggests it’s going to cause more of a deficit than we currently have now.”

As of now, leaders plan to put this bill on the Senate floor by Thursday.

Kyleigh Jarosinski is a TV2 reporter. Contact her at [email protected].