The Republican tax bills now before Congress could save Oregonians $1 billion a year overall, a preliminary state analysis indicates. But those benefits may elude many middle-class residents, recent college graduates and taxpayers with high medical bills.

The bills would hit Oregonians much harder than taxpayers in most other parts of the country. That's because Congress is moving to end a deduction for state taxes, which enables Oregon residents to deduct every dollar they spend in state taxes. That provision benefits 670,000 residents a year, according to state data.

Oregon taxpayers at the top of the income ladder could pay tens of thousands of dollars more per year without the deduction. But even households earning less than $75,000 could face tax increases averaging about $1,200, according to the preliminary analysis from Oregon's nonpartisan Legislative Revenue Office.

"I think this is a middle-class tax hike. I think the middle class is going to be severely impacted by this bill," said Brent Lipschultz, a tax and financial planner with PricewaterhouseCoopers in New York. That's true in many places, he said, but especially in Oregon.

"Losing deductions effectively increases the (tax) rate," Lipschultz said.

The federal tax cuts would also produce a counterintuitive side-effect: They would boost the state taxes that Oregonians pay, according to the state and private tax experts. That's largely because Oregon directs taxpayers to calculate their taxable income using federal tax rules.

So if Congress follows through and curtails or eliminates some federal tax deductions, including those for property taxes, medical costs and college loan payments, that would also wipe out the corresponding deductions on Oregon taxes. That, and other factors, could require state income tax payers to owe more and generate more than $150 million a year in new state tax revenue.

The potential increase in state revenue isn't unique to Oregon, according to state revenue officials and private tax economists. But it hasn't been widely reported.

EFFECTS IN OREGON

A great deal of uncertainty remains about the proposed tax changes. But here are some potential implications for Oregonians, based on a preliminary analysis by the Legislative Revenue Office.

IMPACTS ON FEDERAL TAXES

• Federal income taxes paid by Oregonians could drop by $1.2 billion annually due in large part to declines in income tax rates and a larger standard deduction. That works out to $300 in savings, per person. But many of those savings would vanish within several years.

• The elimination of the federal deduction for state and local taxes would have an especially pronounced effect in Oregon, which has an unusually high income tax. For the 40 percent of residents who deduct their federal taxes, it could add an average of $2,800 to their tax bill.

IMPACTS ON STATE TAXES

• Many Oregon taxes are tied to federal tax policy, so any change Congress makes will have a ripple effect here. As a result, lower federal taxes would likely raise roughly $150 million in new state tax revenue. That’s mostly because eliminating federal deductions also wipes out those deductions in Oregon.

• Also, Oregon allows taxpayers to deduct their federal taxes from their state taxes. So if federal taxes go down, that means Oregonians have less to deduct. And fewer deductions mean more taxes.

While the U.S. Senate approved its version of the tax overhaul early Saturday, Eastern time, a great deal remains uncertain. There are substantial differences between its bill and the one approved Nov. 16 by the House of Representatives, and the two chambers plan to begin reconciling them Monday.

Each chamber must vote again once they've completed that process.

With so much in flux, it's too soon to pin down the bills' precise effects. Still, it's possible to draw some general conclusions based on similarities in the House and Senate versions.

In broad terms, both bills would lower the corporate tax rate, reduce the number of tax brackets for personal income, increase the standard deduction, and offset some of those tax savings by eliminating several other widely used tax deductions.

In many ways, those changes would apply to Oregonians the same way they apply elsewhere. Residents here figure to save $300 per person on their federal tax bills, on average, according to the state's preliminary analysis, though benefits will vary considerably by household.

Beneficiaries include low- and middle-income taxpayers who don't itemize their deductions and could benefit from standard deductions that nearly double in both the House and Senate bills.

The House bill would repeal the alternative minimum tax, which affects 59,000 Oregon taxpayers, according to state data. That would be a major benefit for upper-income Oregonians, as three-quarters of the state taxpayers who pay it have annual incomes above $200,000.

Large corporations and their shareholders would benefit from a sharply lower tax rate, which would fall from 35 percent to 20 percent. Intel lobbied heavily for the tax cuts, with chief executive Brian Krzanich visiting President Donald Trump in the Oval Office and House Speaker Paul Ryan visiting an Intel site in Hillsboro to meet with corporate executives on the proposals.

The bills' treatment of privately held companies could also benefit small, capital-intensive businesses. Lipschultz said that could include including forestry businesses in Oregon and small manufacturers.

But low-income Americans, or those making less than $30,000, would actually pay more under the Senate measure, according to the Congressional Budget Office.

Another congressional analysis of the Senate bill found that more than 60 percent of Americans would save at least $100 a year in federal taxes, meaning that close to 40 percent of those tax filers would either get a negligible cut or pay more. And any initial savings would erode over time because the new individual tax brackets expire after 2025.

Every Oregon Democrat in Congress opposes the tax proposals under consideration. U.S. Rep. Greg Walden, the state's lone Republican delegate and a powerful figure in the House leadership, voted in favor of it. His office did not respond for requests for comment on the Oregon implications.

Oregon's unusual tax structure means the congressional proposals would affect the state differently in some key ways.

ELIMINATING SALT

"The biggest issue is the fact that you don't get to deduct your state and local taxes" under the congressional proposals, said Heather Jackson, a tax planner with Dougall Conradie in Portland who frequently testifies before the Oregon Legislature on the intersection of federal and state tax policy.

"Is that a big deal? Yes, it is," Jackson said. "Will that hurt Oregonians? Yes, it will."

Removing the state and local tax deductions, collectively known as SALT, is a much bigger deal in Oregon than in most other states. Here's why.

Federal law allows taxpayers to deduct either their local income taxes or sales taxes on their federal returns. Many states have both, so taxpayers can deduct only a portion of their state taxes. Oregon is one of just three states with an income tax but no sales tax. So Oregonians who itemize their deductions can deduct all taxes they pay the state.

Oregon compensates for the absence of sales tax revenue with a relatively high income tax rate, which tops out at 9.9 percent.

That comparatively high rate makes the state and local tax deduction especially valuable to Oregonians, with deductions totaling $8.5 billion in 2015, according to the Oregon Legislative Revenue Office. Nearly 40 percent of taxpayers living in Oregon claimed the state deduction in 2015, the most recent year for which data is available.

Eliminating the deduction could cost those taxpayers an average of $2,800 per household, according to another analysis the revenue office conducted at the request of The Oregonian/OregonLive.

The additions to the federal tax bill would be highest for those at the top end of the income ladder – those earning more than $500,000 a year could see a $25,000 annual hit. That could be offset by other changes in the Republican tax plan favorable to high-income Americans.

Roughly 275,000 Oregonians with incomes below $75,000 claimed the deduction, too – they would pay about $1,230 more a year, on average, based on Oregon's tax rates.

Overall, 70 percent of the benefits from the state deduction accrue to Oregonians with annual household incomes in excess of $100,000.

Many lower-income filers wouldn't claim the state deduction any longer under the proposed tax overhaul. That's because the legislation would nearly double the standard deduction each taxpayer may claim to about $12,000 for single filers and $25,000 for couples, making it more valuable to them than the state income tax deduction.

OREGON TAXES RISE

Republicans are moving to eliminate the state and local deductions, and other tax deductions, to offset the cost of new tax breaks and lower tax rates for large corporations. To comply with Senate rules governing voting procedures, the cuts must add no more than $1.5 trillion to the deficit over 10 years.

Other deductions on the chopping block include one for medical expenses and one for student loans, along with limits on the deduction for local property taxes. Oregon offers tax breaks for all those expenses, tied to the federal deductions.

"It's not uncommon for states to tie to federal deductions because it's an ease of administration (issue) for the states," said Chris Allanach, an economist in Oregon's Legislative Revenue Office.

So if those federal deductions go away, state deductions do too, and Oregonians would pay more state income taxes, fueling state coffers.

Under the House tax bill, Allanach estimates that repealing the medical expense deduction would increase state revenue by $65 million annually. The Oregon Center for Public Policy says 165,000 Oregonians take the deduction.

The Senate version leaves the medical deduction intact. Negotiators from both chambers will have to work out a deal on differing provisions in the two bills.

To take the deduction, taxpayers must spend at least 10 percent of their income on medical expenses. That's a high bar, and Allanach said taxpayers at the lower end of the income brackets are most likely to benefit because it is difficult for a wealthy person to reach the 10 percent threshold.

Eliminating the deduction for student loan interest would generate $19 million in annual revenue for Oregon, most likely paid by young graduates in the early years of paying off their college loans.

Conversely, the House's plan to limit the federal property tax deduction to $10,000 would most likely apply to the rich. That's because few low-income people own homes with more than $10,000 in property taxes. Allanach estimates limits on that deduction would raise $16 million in state revenue annually.

Taxes here would rise for another reason: Oregon, like other states, allows taxpayers to deduct their federal taxes -- up to a limit -- from their state taxes. So if federal taxes decline, then Oregonians have less to deduct from their state taxes.

Federal tax cuts leading to higher state tax bills would likely happen in many other states that tie their tax policies to federal law, according to Nicole Kaeding, an economist with the Tax Foundation, a Washington, D.C.-based think tank. But she said it hasn't been quantified on a state-by-state basis, and it's too soon to know just what it will mean in any state.

"Tax reform as it's currently structured in both the House and Senate should increase revenue for the state of Oregon, but until the final package is signed, the exact state impacts are not certain," Kaeding said.

No other state, however, has Oregon's unique kicker law, which refunds unexpected revenue to taxpayers. So Allanach said additional state funding resulting from federal tax cuts may not materialize in the near term.

"If more revenue comes in, it could trip the kicker," he said. In future years, though, state forecasters would include additional revenue in their planning and so the new revenue would not make a kicker more likely.

Oregon state Sen. Mark Hass, D-Beaverton, chairs his chamber's finance and revenue committee. He worries the tax cuts will trigger cuts in federal spending as the deficit grows, he said.

But he said his committee already has a placeholder bill filed to respond to any changes Oregon needs to make in response to the new federal laws.

"We'll be ready if we need to make any tweaks," Hass said. "I don't think it'll be drastic."

Hass said it's important not to let the federal changes distract from flaws in Oregon's own tax structure that create wide disparities in property taxes and extreme volatility from year to year in tax collections.

The federal tax overhaul "is not the most important thing to happen to Oregon taxes," he said. "The other things still need to be addressed, and they're far more difficult."

Update: This article has been updated with the passage of the Senate bill early Saturday (Eastern time.)

-- Mike Rogoway; twitter: @rogoway; 503-294-7699