The outlines of the promised Trump tax cut are coming into focus.

Last year, then-candidate Donald Trump Donald John TrumpBarr criticizes DOJ in speech declaring all agency power 'is invested in the attorney general' Military leaders asked about using heat ray on protesters outside White House: report Powell warns failure to reach COVID-19 deal could 'scar and damage' economy MORE unveiled an ambitious tax cut proposal that would dramatically slash personal and corporate income taxes. It joined equally ambitious tax cuts proposed by the other 16 Republican presidential candidates.

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All the candidates focused on reducing the corporate income tax rate of 35 percent, famously the highest in the industrialized world. Trump was the most aggressive, proposing to bring the corporate income tax rate down to 15 percent.

In the past, House Republicans had settled on a 25 percent corporate rate. After Trump’s unveiling of his 15 percent rate, House Republicans moved their proposed corporate rate to 20 percent, moving towards the Trump target of 15 percent.

The Trump campaign then looked around and saw that the House blueprint, unveiled by Speaker Paul Ryan Paul Davis RyanAt indoor rally, Pence says election runs through Wisconsin Juan Williams: Breaking down the debates Peterson faces fight of his career in deep-red Minnesota district MORE (R-Wisc.), and every single one of their Republican primary competitors expenses investment. The Trump campaign added full expensing for business investment to its plan.

Expensing allows businesses to deduct the value of new business investment the year it is made, rather than over a prolonged depreciation scheduled that can take place over many years, depending on the type of investment. It dramatically reduces the cost of capital investment.

The Trump campaign also accepted the House Republicans’ plans for an across-the-board tax cut on individuals that folds the seven individual tax brackets down to three, with a top rate of 33 percent and a standard deduction of $12,000 for individuals and $24,000 for families.

That process of the Trump and House Republican blueprint plans circling each other and merging continues. These are the settled matters, which are as settled as any negotiation that has not fully heard from the Senate allows.

The death tax, created to pay for the Civil War (on both sides) lived 10 years after Appomattox but was put to sleep in 1875 and revivified to pay for World War One which ended in 1918, will finally be put to death.

The alternative minimum tax, imposed in 1969 by Richard Nixon to be certain that 155 millionaires did not escape taxation by investing in tax-free municipal bonds, “trickled down” to hit several million Americans. It will be repealed fully.

The corporate income tax rate will drop from 35 percent to 20 percent and the tax rate paid by subchapter S corporations, also known as pass-throughs, businesses that pay taxes through the individual tax returns of the owners will drop from a high of 39.6 percent to 25 percent. This deal brought peace to the large and small business divide.

The seven individual income tax brackets—39.6 percent, 35 percent, 33 percent, 28 percent, 25 percent, 15 percent and 10 percent—are folded into three rates of 33 percent, 25 percent and 12 percent.

The United States will join most of the rest of the world and tax income on a territorial basis, meaning we will tax what happens here in the United States, not overseas.

American firms earning a dollar overseas will, in the future, be able to “repatriate” those earnings, bringing them back to the United States without penalty or tax. Present law allows American firms to “defer” American corporate taxes until money earned overseas is returned. As a result more than $2 trillion dollars is “locked” overseas.

The House blueprint would hit earnings overseas with a one-time tax or “deemed repatriation” of, say, 8 percent (3 percent for earnings invested in something other than cash). After that, the United States would have a fully territorial system and earnings could flow back to America unharassed. This change will unlock about $2 trillion to flow back the united states sometime before the 2018 election. One can imagine the stimulus of actual capital being deployed by business owners—not lawmakers.

Lastly, the “border adjustable” corporate income tax would exempt the value of exported goods from taxation and tax the value of imported goods entering the United States, similar to how European nations treat imports and exports. This change will raise $1 trillion over a decade because of the U.S. trade deficit. It will hike the costs of imports and consumer prices but also strengthen the purchasing power of the U.S. dollar.

Its attractiveness to tax reformers is that it is a significant “pay for” and it allows America to shift to a fully territorial system that taxes based on point of consumption and drastically simplifies the U.S. international tax system. This is viewed by House Republicans the capstone that holds the rest of the structure in place. It will be the focus of the most debate and remains the largest “open question” in tax reform.

The House will present its package, in sync with the Trump White House, within the first 100 days of the administration. It will have Senate approval by July before the August recess. Pessimists believe the final bill may pass in September of October.

It will be passed by reconciliation. No Democrat votes are expected or needed from either body. This will pass with 51 votes in the Senate, and it is structured in a way that will make it permanent, unlike the George W. Bush tax cuts of 2001 and 2003.

What will it be called? Whatever its paternity. It will be the “Trump Tax Cut” just like the Kemp-Roth tax plan—a decade in gestation in Congress—became the Reagan tax cut.

Grover Norquist is president of Americans for Tax Reform.

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