Senator and Republican presidential candidate Tim Scott (R-SC) released a new economic plan this week. The plan addresses issues such as the national debt, federal spending, trade, and the economy. The plan includes several significant tax policies. His plan focuses on cutting taxes for both individuals and businesses and argues that this would grow the economy.

The plan would permanently extend the individual income tax cuts passed as part of the Tax Cuts and Jobs Act (TCJA). The TCJA reduced statutory tax rates, reformed and expanded family benefits, introduced a special 20 percent deduction for pass-through business income, and limited certain itemized deductions. Most of these provisions are currently scheduled to expire after 2025.

The proposal would also reform aspects of business taxation. His plan calls for permanently allowing businesses expense equipment and machinery and would accelerate depreciation for longer-lived assets such as buildings and structures. Scott would reverse the requirement that businesses amortize research and development costs, allowing companies to, once again, expense them. His plan calls for further expansion of the research and development tax credit and would further limit the ability for firms to deduct interest expense.

His plan would also expand several credits and deductions. His plan would expand the child tax credit by allowing pregnant women to qualify and by making the adoption tax credit refundable. He would also expand the educator tax deduction. He also discusses the possibility of introducing a new tax credit for nuclear energy production.

He also wants to repeal the estate and gift tax, which was temporarily scaled back as part of the TCJA.

Finally, his proposal calls for expansions to “Opportunity Zones.” These zones were also enacted as part of the TCJA and provide capital gains tax breaks to taxpayers that invest in designated communities in the United States.

Scott recommends several worthwhile policies. Making bonus depreciation permanent, accelerating depreciation for structures, restoring expensing of research and development costs, and further limiting business interest deductibility would move towards cash flow taxation of businesses. This would address many of the flaws with the current business tax.

His proposals would reduce federal revenue significantly. Permanently extending the individual provisions of the TCJA would reduce federal revenue by roughly $2.8 trillion between 2024 and 2033. Limiting the ability for firms to deduct interest expense would raise some revenue, but his other provisions would reduce revenue even further.

Tim Scott, in an interview, argued that his plan would stimulate growth and ultimately raise revenue. This is implausible. It is true that some of his tax policies would be pro-growth, but the additional economic activity would not come close to offsetting the tax cut. Scott’s plan also calls for an immediate cut in non-defense discretionary spending to a pre-pandemic baseline. However, it is not clear this could fully offset his tax cuts.

The plan also leaves a few tax issues unaddressed. The individual provisions are not the only TCJA policies set to change in 2025. Taxes on multinational corporations are scheduled to rise as the tax rates on GILTI, FDII, and BEAT increase. Likewise, his plan does not address the “global minimum tax” deal that is currently being enacted throughout the world and debated in Congress. It is also unclear what Scott would do with the green energy tax credits and business tax increases enacted as part of the Inflation Reduction Act.

Scott’s plan leans heavily on extending the 2017 tax law and tinkers around the edges of the tax code. It would make some improvements to business taxation, but overall, the plan is conventional and focuses much more on tax cutting than tax reform.