The GOP's tax proposal summarized - Nomura

Analysts at Nomura offered their summary of the tax proposal from the Gop.

Key Quotes:

"Today President Trump and Republican Congressional leaders released a “framework” for potential changes to the US tax code. The stated goals of the proposal are to reduce the complexity for individuals, provide middle-class tax relief, and lower the tax rates on businesses. 

What was not discussed today were the aspects of the tax reform that we believe will make it difficult to pass: the effects on the deficit, the elimination of tax deductions, and the distributional impacts. 

In the coming weeks and months, these unresolved issues will have to get more attention. Some clues to how much the Republican Congress is prepared to increase the deficit should emerge in upcoming budget debates and votes. Lobbyists will spring into action to protect their interests in the tax code. In addition, independent organizations will produce estimates of who stands to gain the most and who would fare the worst in the various scenarios under the proposed framework. 

Overall, today’s announcement does not change our overall assessment that Congress will likely pass tax cuts for individuals in early 2018. We may also get a modest reduction in corporate taxes. However, given the complexity of the corporate tax code, concerns over the deficit, and the ability of special interests to sway the few Republican senators needed to thwart any plan, we remain pessimistic about the likelihood of significant corporate tax reform."