This is the Cato Daily Podcast for Wednesday, October 4th, 2017. I'm Caleb Brown. The tax plan now floating in Congress

would collapse tax rates while eliminating some deductions and

increasing others. Chris Edwards, Director of Tax Policy Studies at the

Cato Institute, evaluates the plan.

Help us make sense of this tax plan.

What's in it?

Well, the big Republican tax plan released this week doesn't really have that much new that we haven't heard from the Republicans for month.

They want a deep cut to the corporate tax rate, which is a very good policy.

They want to shrink the seven individual income tax brackets from seven brackets down to three brackets with somewhat lower rates, so that's good policy.

They want to have a so-called expensing of capital investments.

In other words, businesses would be able to immediately write off when they buy new equipment.

And they would move to a so-called territorial system for big corporations.

The foreign profits of U.S. companies wouldn't be taxed, which would be a good thing for the location of factories and headquarters for big corporations

in the United States.

So it's generally a very good framework.

I am surprised that we're moving into October and the Republicans

don't really have details of their plan yet. So frankly, they really got to start hustling their back sides here and moving legislation

through the House and Senate tax committees so we can actually get this done by the end of

the year.

How does full expensing in the same tax year for capital purchases?

Well, how does that change how companies would make capital investments?

It would be a big spur to capital investment and it would simplify the tax code.

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