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3 things you should know about Trump's tax reform plan

President Donald Trump outlined his administration's plans on tax reform during a speech Tuesday at the Heritage Foundation's President's Club Meeting in Washington, D.C. (Mandel Ngan/AFP/Getty Images)

President Donald Trump on Tuesday shared his plan for tax reform during a speech at the Heritage Foundation in Washington, D.C.

“Lower taxes on American business means higher wages for American workers, and it means more products made right here in the U.S.A.," Trump said in a White House news release.

Simply put, Trump said his tax reform plan will cut taxes for working families, it will simplify the tax code and significantly reduce corporate taxes for small- to medium-sized businesses. It will put about $4,000 back in the average American's paycheck and businesses will "stay, hire and grow in America," he said.

No. 1: Cut taxes for working families

The administration's plan:

● Reduce the number of tax brackets from seven to three, which means the first $12,000 for an individual and $24,000 for a married couple would be tax-free.

● Increase the Child Tax Credit and expand it to benefit more middle-income families and eliminate the marriage penalty.

● Create a $500 tax credit for those carrying for an adult dependent or elderly loved one.

How it will reportedly help: 

● Larger paychecks for Americans.

● More money to be put back into our local economies through consumer spending.

No. 2: Simplify the tax code

The administration's plan:

● A single-page tax form.

How it will reportedly help:

● An estimated 90 percent of taxpayers would qualify to use the single-page form.

● It could save taxpayers millions of hours on tax preparation.

● Could possibly save billions in tax preparation costs.

No. 3: Reduce business tax rates

The administration's plan:

● Cut corporate tax rate from 35 to not more than 20 percent.

● Small business tax rates would be capped at 25 percent.

● Businesses would be able to expense the cost of equipment the year it's purchased.

How it will reportedly help:

● More than 30 million businesses top marginal rate would be cut by about 40 percent.

● Proposed tax rates would be the lowest for small- to medium-sized businesses in more than 80 years.

● Makes more cash available for hiring, purchasing, and spending.

Trump said his plan would create jobs, put Americans back to work and restore America's competitive business edge.

“We will lift our people from welfare to work, from dependence to independence and from poverty to total beautiful prosperity," Trump said.

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