The Republican-led tax proposal, which is a 400-page bill, has a lot of points that matter to investors – from the number of tax brackets to changes in deductions. With the government moving to get something in front of President Donald Trump before the end of the year, The Charles Schwab Corporation's (SCHW) vice president of legislative and regulatory affairs Michael Townsend broke down what investors should care about most.

Take the tax brackets for starters. While Republicans are leaving the top rate for the most wealthy Americans alone at 39.6%, the bill would reduce the number of brackets for the rest of Americans to just three: 12%, 25% and 35%. Those individuals who earn more than $500,000 and couples that make more than $1 million combined would still face the 39.6% tax bracket. The reduction in the number of tax brackets has long been a promised part of tax overhaul.

On the retirement savings incentives front, heading into the release of the tax reform proposal, there were concerns that Republicans would reduce the cap on tax-free contributions. That would have been a blow to Americans saving for their retirement and the brokerage firms that make money selling 401(k) and retirement savings products. According to Townsend, "after considerable public outcry and a tweet from President Donald Trump flatly stating that there would be no changes to 401(k) plans,"  that provision was dropped from the bill.

[Start trading with a reliable broker after reading Investopedia's broker reviews.]

Investors who make money on their investments won't see any taxation changes from the bill either. According to the Charles Schwab executive, the bill calls for the tax rates on capital gains and dividend income to stay at 0%, 15% and 20%, depending on the person's income. There are also no changes to the Net Investment Income Tax, which was supposed to be eliminated when the Affordable Care Act was repealed. Republicans failed to repeal Obamacare, and as a result, the 3.8% surtax on investment incomes for wealthy Americans stays for now.

The estate tax – one that many Republicans hate – would go away in 2024. The exemption from the estate tax would double to $11.2 million for individuals and $22.4 million for couples in 2018, noted Townsend. The bill also enables heirs to continue to pay capital gains taxes on the value of the asset at the time of the death of the previous owner, not the time the previous owner acquired the assets, Townsend said. The proposal also gets rid of the unpopular Alternative Minimum Tax and nearly doubles the standard deduction from $6,350 to $12,000 for individuals. For couples, Townsend said that the deduction would be increased from $12,700 to $24,000.

What Townsend thinks will be at the heart of the tax reform proposal debate is the move to eliminate most deductions and credits as well as the reduced deduction for home mortgage interest. Currently, homeowners can deduct the interest on mortgages for up to $1 million. That will be reduced to $500,000 for new home purchases. As for the elimination of most deductions, Townsend said that the bill gets rid of "hundreds of popular tax incentives, including those for medical expenses, student-loan interest and adoption expenses."

So what should investors do now that the bill has been released? Townsend says nothing, since it is only the first step in what will undoubtedly be a long process with changes likely along the way. "The biggest stumbling block remains the Senate, where getting to 50 votes isn't a sure thing. Clarity will come only as the process unfolds in the weeks ahead," said the Schwab executive.