GOP tax reform winners and losers: How will the bill impact you?

(Source: WOIO)
(Source: WOIO)

CLEVELAND, OH (WOIO) - President Donald Trump says Republicans and Democrats have struck a deal on tax reform.

That agreement, which combines parts of the bills passed by the House and the Senate, would decrease the corporate tax rate from 35 percent to 21 percent.

It will also cap the tax on most earners at 37 percent.

Trump promises the tax plan will cut rates for most Americans and all businesses, but how much you actually get back depends largely on how much you make now. We talked to economist Dr. John Burke about who will see a cut and how much.

"The first thing, let's divide the world into two classes. One class over here is going to be business and the other class over here is going to be people. First of all, this group is going to make out tremendously under the new tax law," said Dr. Burke.

For individuals, there are fewer tax brackets, and many middle income families will see their taxes decrease if the Republican tax plan passes.

For a person making $20,000 a year, he says the savings will be a lot less, because that worker is already paying fewer taxes.

For someone making $50,000, he says the difference will be bigger.

"Depending upon the size of your family, whether you have children, you could probably end up getting a small amount of tax return, maybe somewhere between $100 and $500," said Dr. Burke.

For an earner making $100,000 annually, he estimates the tax savings could be closer to $1,000 to $1,200.

If you're making a million bucks or more, the bill could impact you more, possibly cutting your rate by five percent. However, some or all these savings could be offset by deductions, including those for state and local taxes and your property.

"A lot of that is going to disappear," said Dr. Burke. "That is going to be especially important in the state of Ohio, where we have income taxes and we have property taxes."

The deal struck between the two houses also eliminates the individual mandate to buy health insurance, a hallmark of the Affordable Care Act. Both houses must vote to approve the final version of the bill. It will then go to the president's desk, who has said he will sign it into law.

Copyright 2017 WOIO. All rights reserved.