WATCH | Republicans are still licking their wounds after losing the battle to repeal and replace Obamacare last week, but President Trump is ready to move on to his next big agenda item: Tax reform. Here's what that legislation might look like.
Trump had a hands-on role with the GOP healthcare plan, but tax reform will be his personal pet project.
During a press briefing on Monday, White House Spokesman Sean Spicer told reporters that Trump's Administration would be "driving the train" on tax reform, but added that Trump would consult with Congress.
Here's what we might see in a Trump tax reform plan, and how that could affect you.
Simplifying the tax code
Trump wants to completely revamp the individual income-tax bracket system, by slashing the number of brackets from seven to just three. People would be taxed at either 12 percent, 25 percent or 33 percent.
That's good for richer Americans who are currently paying a higher rate, but some middle class Americans could end up getting moved into a slightly higher tax bracket under Trump's plan.
But Trump also wants to give low-income workers a break by dramatically increasing standard deductions.
Your standard deduction is the amount of income that is not taxable. Under current law, a single filer would have a standard deduction of $6,300 and joint filers would have a deduction of $12,600.
Trump wants to increase those deductions to $15,000 for single filers and $30,000 for joint filers. Meaning, if you make less than that, then you can claim the standard deduction and pay zero federal income tax.
Corporate tax breaks
The bigger issue will be corporate tax reform. Trump wants to slash the corporate income tax rate from 35 percent, one of the highest global rates, to just 15 percent, which would be one of the lowest rates for developed countries.
The idea is to spur big companies to invest more and creates more competition by letting them keep more of their money. Classic trickle-down economics.
Border Adjustment Tax
Both Republicans and Democrats want a tax reform bill that will bring back jobs and money from overseas.
House Speaker Paul Ryan is pushing for a 20 percent border adjustment tax in the new legislation, but not everyone else in Congress agrees.
A border adjustment tax basically slaps a tax on imports, but exports go tax-free. The hope is that the tax would raise $1 trillion over 10 years to offset corporate tax cuts.
Trump hasn't come down on a side on the border adjustment tax, although he did mention it in his speech to a joint session of Congress in February.
Several key Senate Republicans, including John McCain and Orrin Hatch have said they will not support a border adjustment tax.
Rep. Kevin Brady, who chairs the House Ways and Means Committee which is working on tax legislation told reporters last week the border adjustment tax is a "bold approach" that will make America more competitive in the global markets.
An ambitious timeline
Treasury Secretary Steven Mnuchin on Friday said that he will push Congress to pass comprehensive tax reform before the August recess, according to Reuters.
That is a very ambitious timeline, and some Senate Republicans already say it will take longer than that.
GOP lawmakers will have to rethink their legislative strategy too. The now dead healthcare bill was meant to be a launching point for tax reform.
"This makes it clearly more difficult," Ryan said in a press conference after the healthcare bill was pulled from the House floor on Friday.
"But it does not in anyway make it impossible," Ryan added.