Congressional Republicans unveiled legislation to reform the tax code Thursday in a major step towards implementing one of their top policy goals.

Republicans have long advocated for tax reform as a means of creating economic growth. They began laying the groundwork for the current reform effort nearly two years ago. They have hinted at what the bill might look like while releasing a few summary plans over the past year. The Tax Cut and Jobs Act now reveal exactly what lawmakers hope to accomplish.

Republicans have focused on cutting rates and simplification throughout the process. The tax reform bill reduces the seven current income brackets down to four. The bill is also written to lower rates for most upper and middle-income earners. It will also eliminate or reduce some tax deductions and exemptions.

The tax brackets determine what people will be taxed based on their income level. The highest income bracket under the bill taxes married couples making over $1 million dollars and individuals making half that at the current top rate 39.6 percent, despite earlier promises it would be reduced. The threshold is increased so fewer people will be at the top rate. Republicans explored the possibility of a 33 percent top rate last year, but it was slowly raised throughout the negotiation process.

The next highest income bracket taxes individuals making over $200,000 and married couples making over $260,000 at 35 percent. The next bracket will tax individuals making above $67,500 at 25 percent. That increases to $90,000 for joint filings. The lowest income bracket imposes a tax of 12 percent. A zero percent rate will also be applied to the lowest income earners.

Republican leaders began unveiling details of their tax reform bill hours before it was officially released. The talking points were circulated among members of the media. It included several notable changes from earlier policy drafts like maintaining the 39.6 percent rate for the highest income earners.

The National Taxpayers Union Foundation found in a 2015 study that the tax code is so complex that the economy loses $233.8 billion and 6.1 billion hours of productivity annually. The bill is designed to simplify the tax code by eliminating certain tax breaks. Charitable gift tax deductions will be protected with cash contributions seeing an increased limit.

The tax reform bill would also repeal deductions for taxes not paid or accrued in a trade or business, personal casualty losses, state and local income taxes and sales taxes, tax preparation expenses, most medical expenses, and expenses attributable to the trade or business of performing services as an employee. It allows personal casualty loss deduction only for those affected by the recent hurricane season.

The bill also repeals the alternative minimum tax and the death tax. The death tax, officially known as the estate tax, will be fully repealed after six years. The bill will first double exemptions for the death tax from a $5 million threshold to $10 million, so more people can avoid it before it is completely phased out.

Republicans are also hoping their plan will boost economic growth by alleviating the tax burden businesses face. The bill reduces the top rate for corporations down to 20 percent. The top rate is currently at 35 percent. It also limits the rate paid by pass-through entities down to 25 percent. Those businesses are often small and family-owned.

Pass-through businesses include sole proprietorships, partnerships, and S corporations. The owners and investors are directly taxed on their income instead of having a corporate rate applied to their business. But critics have warned the policy could be abused by wealthier individuals since not every pass-through business is small or family-owned. The bill addresses the concern by establishing safeguards intended to distinguish between individual wage income and pass-through business income.

The tax reform bill was delayed by a day due to lingering disagreements among party members. The House Ways and Means Committee confirmed the delay Tuesday night after it was first reported by media outlets. The committee is confident it is still on schedule to pass the bill next week. The bill would then go onto a final vote on the House floor.

Republicans have faced criticism throughout the last year as they have formulated their tax reform plans. Democrats and other critics have expressed concern that the reforms will mostly benefit the rich while doing little for middle and lower income earners. The White House countered that the top rate will see a bigger reduction simply because they pay a lot more taxes already.

Critics expressed concern at an earlier policy draft for appearing to increase rates for lower-income earners. The lowest income bracket is currently below the proposed 12 percent rate at 10 percent. But the bill also includes what is known as a zero percent rate for the lowest income earners in the form of an enhanced standard deduction.

The zero percent tax rate essentially acts as an unofficial fifth tax bracket. The bill is written to roughly double standard deductions so those that make below the increased amount will pay nothing. The changes will eliminate taxes on the first $24,000 of income earned by a married couple, and $12,000 earned by individuals.

President Donald Trump has focused his agenda on helping employers and their workers. He has been particularly concerned with keeping jobs from going overseas. The bill reflects that by taxing domestic parent companies of foreign subsidiaries at 50 percent of those offshore profits.

The tax reform bill also repeals what are known as state and local (SALT) tax deductions. SALT deductions allow taxpayers who itemize to deduct some of their local taxes on their federal taxes. The repeal faced backlash when it was proposed in earlier policy drafts. There were rumors the SALT deductions would be preserved in the week leading up to the release of the bill.

The tax reform bill also includes a long list of other provisions within its 429 pages. The bill enhances the child tax credit while including a new family tax credit. It repeals nonrefundable credits, and it allows for full expensing for at least five years. It also streamlines higher education benefits with the intent of helping families save for education expenses like college tuition.

Former President Ronald Reagan was still in office the last time the tax system was reformed in a comprehensive way in 1986. It has gone through minor changes in the decades since. The Congressional Budget Office (CBO) found in an analysis that many other developed countries have since started moving towards a more competitive tax system, putting domestic businesses at a disadvantage.

Congressional Republicans provided a preview into how the bill might look when they released a framework for tax reform Sept. 27. The tax reform framework came after a year of hearings and discussion among party members.  House Speaker Paul Ryan and Rep. Kevin Brady introduced a blueprint which outlined their earlier policy goals June 2016.

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