Wealthier Americans are expected to receive the greatest benefits from Trump's tax legislation, while lower-income citizens may see a decrease, according to the Congressional Budget Office.
The Trump administration's Tax Cuts and Jobs Act (TCJA) and related legislation, often referred to as the "One Big Beautiful Bill," has been a subject of controversy since its passage in July. According to the Congressional Budget Office (CBO), the law has disproportionately benefited the wealthiest Americans while worsening economic conditions for the poorest.
The CBO's report reveals that the poorest 10% of Americans lose about 3.1% of their income annually, approximately $1,200, mainly due to cuts and restrictions in government programs like Medicaid and food assistance. In contrast, the richest 10% gain an average of $13,600 annually from tax cuts.
The legislation has increased income inequality by favouring corporate tax cuts and reducing deductions, primarily benefiting high-income individuals. Middle-income households see smaller tax cuts, often under $100 annually, while upper-middle-income households see tax cuts exceeding $1,000. However, the largest absolute gains accrue to the wealthiest.
Beyond tax rates, the legislation's spending provisions have tightened eligibility and funding for vital social safety net programs such as Medicaid and food assistance, exacerbating financial hardship for low-income families. These program cuts contribute directly to the income loss experienced by the poorest households.
Analyses also show that the tax law has deepened racial inequities, with White households capturing 80% of the tax benefits despite being only 67% of tax filers. This suggests that the rich among minority groups, particularly Black households, receive disproportionately less benefit compared to Whites.
Lawmakers are currently away from Washington, taking their messages about the bill to voters. The White House deputy press secretary, Abigail Jackson, stated that the legislation is putting America First, delivering savings for hardworking families, boosting the economy, and securing the borders. Republicans are promoting the positive aspects of the legislation, arguing that tax cuts will stimulate economic growth.
However, Democrats warn that the legislation's tax cuts and spending priorities would come at the expense of vital government aid programs and a ballooning national debt. Rep. Jason Smith, the Republican chair of the House Ways and Means Committee, criticized the CBO's methodology in the report.
During a townhall meeting in Lincoln, Nebraska, a crowd chanted "Tax the rich" in response to Republican Rep. Michael Flood. The nonpartisan CBO reported that President Donald Trump's tax and spending law will result in less income for the poorest Americans, with roughly 2.4 million people no longer eligible for the Supplemental Nutrition Assistance Program due to new work requirements for many recipients.
In summary, Trump's tax and spending law expanded benefits and income for the wealthiest Americans while reducing support and income for the poorest by cutting government aid programs and widening the overall income gap, highlighting significant regressivity and increased inequality.
- The media has extensively covered the controversy surrounding the Trump administration's Tax Cuts and Jobs Act, dubbed the "One Big Beautiful Bill."
- According to the Congressional Budget Office (CBO), this law has widened the economic gap between the wealthy and the poor, with the poorest 10% losing about 3.1% of their income, approximately $1,200 annually.
- In contrast, the richest 10% have gained an average of $13,600 due to tax cuts, a significant disparity in benefits.
- The legislation has also increased racial inequalities, with White households getting 80% of the tax benefits despite comprising only 67% of tax filers.
- Criticism of the law is not limited to economic issues, as it has also been questioned for its impact on vital government aid programs such as Medicaid and food assistance.
- In the realm of science and health-and-wellness, the law has led to 2.4 million people becoming ineligible for the Supplemental Nutrition Assistance Program due to new work requirements for many recipients.
- The general-news landscape is filled with reports on the ongoing political debates about this tax and spending bill, with Democrats emphasizing its potential negative impacts on aid programs and the national debt, while Republicans argue that these tax cuts will stimulate economic growth and benefit all Americans.
