Last Thursday in New York, Republican presidential candidate Donald J. Trump released a tax reform plan. The plan would reform the individual income tax code by lowering marginal tax rates on wages, investment, and business income. Furthermore, it would broaden the individual income tax base. The plan would also lower the corporate income tax rate to 15 percent and modify the corporate income tax base. Finally, the plan would eliminate federal estate and gift taxes while eliminating step-up basis.

Our analysis finds that the Trump tax plan would substantially reduce federal revenues from both individual income taxes and corporate income taxes. These reductions in revenue come primarily from lower rates on individuals and businesses.

One particular tax rate, the individual income tax rate on pass-through business income, is not clearly specified in current plan documentation. Assuming that the individual income tax rate on pass-through business income is the same as the rates on other individual income, the Trump tax plan would reduce federal tax revenue by $4.4 trillion over the next decade. But if the tax rate on this income is instead intended to be the same as the tax rate on corporate business income, the plan would then reduce federal revenue by $5.9 trillion. In addition to these possibilities, which we see as upper and lower bounds for total revenue generation, the policy may reduce federal revenue somewhere in between.

Read the full article at the Tax Foundation: Details and Analysis of the Donald Trump Tax Reform Plan, September 2016