The President’s outline for tax reform sketches the broad outline for lower corporate and individual rates and for closing loopholes.  This reform is vital and would be a major economic stimulus.  However, the plan lacks many details that will need to be decided. Repatriation of overseas profits back into the U.S. and the “expensing” of capital investment will be a boom for the economy and a major driver for job growth in the private sector.

The intentional vagueness on rates allows Congress to negotiate in ways that presumably collects more votes for reform.  On the other hand, the vagueness allows for easy criticism by those who are unlikely to ever support a Trump proposal.

Consumers will find the tax reform outline lacks enough specifics to make it digestible.  This will be no surprise to anyone who has had to sell for a living.  Potential customers don’t want you telling them about your grass seed – they want to hear about their lawn, and sometimes they want to hear more about how their lawn compares with their neighbors’.  We are not yet at a stage where the wished-for specifics are available.

The proposed individual income tax rates of 12%, 25%, and 35% suggest a benign cut (e.g. down from 39.6% to 35%), but since none of the income brackets are specified, the rates could signal a hike in taxes for many consumers.

For consumers who itemize their deductions, taxes paid to state and local government are on the chopping block.  That lost loophole would cost itemizers in the New York metro area, California, Maryland or Massachusetts an extra tax levy of $1500 to $3500.  Married taxpayers filing jointly and who elect not to itemize will be pleased that the standard deduction almost doubles to $24,000.

The top $1,000 child tax credit will be available for those at an unspecified, but higher income ceiling, than the current $110,000.  The much-reviled Alternative Minimum Tax will phase out.

When the eventual specifics of the tax proposal are negotiated and when consumers apply their income and expense specifics to the tax forms, the much sought, specific answers will be revealed.  In March 2017, the Tax Policy Center estimated that the top 1% consumers would benefit by a $175,000 tax cut and the average of those in the bottom 99% would receive a $760 cut.

Business income in the form of “pass through” to the individual owners, can be taxed at the very highest individual rate (was 39.6% and prospectively is at 35%). The Trump proposal specifies a top pass through tax rate of 25%.  The proposed top rate for C-corporation taxes is reduced to 20%, but that is offset by loopholes that are being closed, such as immediate investment expensing and deductibility of some loan interest expenses.

The garish discrepancy between top one-percenters and the rest of us could dominate the tax story and some commenters allow it to do so.  Most of us know there are complexities when comparing the top 1% with other taxpayers.  The Tax Policy Center, says “the top 1 percent of Americans will pay 45.7 percent of the individual income taxes in 2014” and that the bottom 60% pay just 2% of the taxes.

Implicit in the tax proposal is the conviction that when corporations save on taxes, they tend to use those funds as part of their investment, thereby creating jobs, higher productivity, additional operating income and thus additional taxes.

Some commenters deny that multifaceted nature of after-tax income.  Instead they use the existence of any surplus in the owners’ hands to attack business tax reforms, claiming that lower taxes are merely another way to enrich the wealthiest.  Those bids to foster class warfare are destructive and overly simplistic.  Investments enrich owners with profits and they enrich workers with income from additional and better-paying jobs.

We await more specifics on what the Tax proposal may become as it crawls through Congress.  The Tax proposal does not have clear sailing, and it has no chance of being judged on its own merits.  The proposal will be considered simultaneously with the other high-ticket commitments such as additional military funding, funding for the hugely expensive government funded or subsidized healthcare services, and for recovery from the spate of natural disasters we suffered this year.

Consumers expect that the final proposal will be given a fair hearing and will benefit our families, and that should be the case.