Analysis: 10 key takeaways from the Republican tax bill

President Donald Trump is expected to sign a major overhaul of the tax code after the House passed a final iteration of the bill Wednesday. It is his first major legislative achievement and has significant implications for individuals and businesses across America.

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Here are the 10 biggest things to know about the bill.

1. It's the biggest tax overhaul in 30 years, but it's not the biggest cut.

The Republican bill is the biggest change to the tax code since Reagan's Tax Reform Act of 1986. It slashes the corporate and individual income rates, eliminates numerous deductions and sets up a new system for international taxation.

But while it is one of the biggest tax cuts in American history – estimated at $1.5 trillion over a decade – it is not the biggest. According to a common metric – the size of the tax cut in its first two years compared with the size of the economy – the tax bill represents perhaps the fourth or fifth largest cut in modern history. It is estimated at 0.5 to 0.1 percent of gross domestic product in that period.

2. The bill will add about $1 trillion to the nation's debt over the next decade, after taking its economic impact into account.

Republicans have said that the tax bill will "pay for itself" in an effort to counter concerns that it will drive up the nation's debt. The theory goes that, with lower tax rates, the economy will grow so much, and the number of dollars being taxed will increase so much, that the tax cut in the end will be revenue-neutral.

Republicans haven't offered any evidence to back up this claim, however, and multiple independent analyses have suggested that, over a decade, the tax bill will drive up the deficit by between $500 billion and more than $2 trillion. The nonpartisan Joint Committee on Taxation, Congress' official scorekeeper, has projected the bill will increase revenue by $500 billion, meaning its overall cost will be $1 trillion.

3. Most of the long-term benefits go to corporations.

The bill delivers a steep tax cut to corporations – from a 35 percent rate to 21 percent – and brings down most individuals' tax rates as well. In the short term, somewhat more of the tax cut goes to individuals than businesses, but this reverses over the long term. That's because the individual tax cuts are poised to expire in 2025 – a move lawmakers undertook to comply with Senate rules limiting the impact of legislation on the deficit after 10 years.

The corporate tax cut is left permanent, giving businesses a big boost indefinitely into the future.

4. Most Americans will get an immediate tax cut, but the wealthy get much more.

Over 80 percent of Americans will get a tax cut next year under the Republican tax bill, and only 5 percent will see a tax hike. But that's not equal across all income groups. Among those in the bottom 20 percent of earners – taxpayers earning less than $25,400 – only half will see a tax break. Most others in this group will see no change.

Middle-income taxpayers will see an average tax change of less than $1,000, while the wealthy will see the largest tax breaks. The average member of the top 1 percent will get a tax break of $51,140.

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5. In the long run, most Americans will see no tax cut or a tax hike.

The individual tax cuts are set to expire after 2025, for the most part reverting to what the tax code looked like before passage of the legislation. But two provisions will push the taxes of some Americans.

The elimination of the Affordable Care Act's mandate that individuals buy health insurance or pay a fine (as explored further below) is considered a tax hike because it means fewer people who are eligible for federal health subsidies will sign up for health insurance. The legislation also adopts a new formula for calculating inflation in the tax code. The formula, while considered more accurate, would lead more people to enter high-tax brackets faster.

The loss of the individual mandate provision mainly affects low- and moderate-income taxpayers, while the inflation formula affects all taxpayers, with a more pronounced effect for households of more moderate means. The wealthy continue to get benefits in the long-run because of the permanent changes to the corporate tax code, which tend to flow through to higher-income earners.

6. Blue states benefit less than red states in the legislation.

The tax bill eliminates the ability of taxpayers to deduct more than $10,000 in state and local taxes from their federal tax returns. This is one of the biggest changes in the bill and one that could significantly increase the tax burden of people who itemize their deductions – most likely people in the upper-middle or upper class.

Blue states, and especially big cities in blue states, tend to be both higher-taxed and wealthier, meaning people there could be hit the hardest.

7. It would benefit some industries more than others.

Some of the bill's biggest changes come up in the corporate side of the tax code, where the overall rate is lowered and various provisions are scaled back or changed. Some industries fare much better than others as a result of those changes.

8. It takes away a key part of the Affordable Care Act.

The Congressional Budget Office projects that 13 million more people will be uninsured in a decade because of Republicans' decision to eliminate the individual mandate. While some of that decline will come from people signing up for insurance plans on the Affordable Care Act marketplaces, it will also come from fewer people signing up for Medicaid, the insurance program for the poor.

9. It's politically unpopular, but Republicans thought they needed to pass it.

Republicans, despite controlling both chambers of Congress and the presidency for almost a year, had not scored any major legislative victories before the tax bill. That, in addition to their base's and donors' desire to cut taxes, put serious political pressure on the party to get the tax bill through.

In the end, though, they passed an unpopular bill. Though Republicans largely supported it, Democrats and independents, who together make up the bulk of the electorate, opposed it.

Much of that disapproval probably stems from people's beliefs about who the tax cut would help versus who it would hurt. People, on average, saw the bill helping the wealthy and big corporations but hurting people in the lower and middle classes. Most strikingly, only a quarter of people thought it would help their own family.

10. The tax plan sets up years of future decisions for Congress.

Many of the provisions in the bill have expiration dates, most notably the tax cuts for individuals at the end of 2025. Before each of these measures expires, Congress will have to decide whether to extend the policy into the future.

Provisions set to expire:

– Individual tax rates and brackets

– Personal exemption repealed

– Pass-through business income deduction

– State and local tax deduction capped at $10,000

– Business investment write-off

– Child tax credit doubled

– Estate tax exemption doubled

– Alternative minimum tax narrowed