President Donald Trump’stax and spending law will result in less income for the poorest Americans while sending money to the richest, the nonpartisan Congressional Budget Office reported Monday.
The CBO estimates that the 10% of poorest Americans will lose roughly $1,200 a year as they experience restrictions on government programs like Medicaid and food assistance, while the richest 10% of Americans will see their income increase by $13,600 from tax cuts. Overall, American households will see more income from the tax cuts in the legislation, including middle income households, but the largest benefit will go to the top 10% of earners.
The CBO’s report comes as lawmakers are away from Washington, many taking their messages about the bill to voters. Republicans muscled the legislation — deemed “the big, beautiful bill” by Trump — through Congress in July. Democrats all vehemently opposed the legislation, warning that its tax cuts and spending priorities would come at the expense of vital government aid programs and a ballooning national debt.
“This really is a big, beautiful bill for billionaires, but for the poor and the working class in this country, you are actually poorer,” said Rep. Brendan Boyle, the top Democrat on the House Budget Committee, in an MSNBC interview on Monday.
Changes to eligibility for government food assistance under the law will impact millions of Americans, the CBO found. Roughly 2.4 million people won’t be eligible for the Supplemental Nutrition Assistance Program under new work requirements for many recipients. Low-income Americans could also see their income reduced through further restrictions on food aid and other types of assistance included in the law.
Already, more than 10 million Americans are expected to lose health insurance by 2034 due to changes to Medicaid under the law.
Following release of the report, Rep. Jason Smith, the Republican chair of the House Ways and Means Committee, said he took issue with CBO’s methodology, repeating criticism he has made in the past.
“CBO has a troubled track record of getting its estimates incorrect and, like Democrats, is biased in favor of more federal spending and higher taxes,” Smith said on social media. “Don’t buy it.”
Republicans have been eager to sell the upsides of the legislation — arguing that the tax cuts will spur economic growth — while they are on a monthlong summer break from Washington. But those who have held townhalls in their home districts have often been greeted by an earful from voters and activists.
“Tax the rich,” the crowd in Lincoln, Neb. chanted last week as Republican Rep. Michael Flood attempted to defend the bill.
Still, Trump has been undeterred.
“President Trump’s One Big Beautiful Bill is putting America First like never before, delivering huge savings for hardworking families, boosting our economy, and securing our borders,” said White House deputy press secretary Abigail Jackson in a statement last week.
(AP)
Join the official YWN WhatsApp status
3 Responses
Thank you president trump. Please feel free to comment if this news surprised or excites you
Thank you president trump. Please feel free to comment if this news surprised or excited you
Well 1- it’s the ap. Like the nyt they only print information that is harmful to Trump whether it is true or not.
More importantly-
In terms of income in America, when we talk about lowering taxes, the benefit goes to the people who pay the taxes in general. The upper 50% in income pay nearly 100% of all the taxes in America. So by definition, any decrease in taxes will go nearly completely to the upper 50%. Something like the upper 10% pay something like 75% of all the taxes and something like the upper one percent pay something like 25% of all the taxes. The people who pay their taxes or the people who make the most money so if the tax rate goes down, those are the people that would benefit the most.
Next and importantly, there are a lot more people in the upper 50% then there are in the upper one percent by definition . in terms of the amount of money or tax cut goes nearly by definition more goes to the upper 50% rather than the upper one percent just because there are so few people in the upper one percent and so many in the upper 50%. Because the lower 50% don’t pay any taxes. They aren’t supposed to get any benefit when there’s a tax rate cut. They don’t pay it anyway. There are so many more people in the upper 50% as compared to the upper one percent that most of the magnitude of the money goes to them. But on a per person basis because the one percent pays so much more in taxes per person the one percent will see more. But the greatest magnitude goes to the upper 50%.
The analogy I’ve seen is imagine you and your friends go to a pub for drinks. The bill comes to $100. You make a deal that the out of work people pay nothing, the people that only make a little bit only pay a little bit and the dentist to make a lot of money pays like $70 of the bill. That’s our tax rate. Then it turns out either the owner likes you and values you as customers and gives you $20 back. How do you split it? Evenly? Of course not. Half of you got free drinks and didn’t pay any taxes. The rest paid two or three or five dollars for their drinks. One guy paid $70 out of the hundred dollar bill. How do you divide the $20 that they give back? Well, the guy who paid the $70 out of $100 for the drinks should get most of that. That is the mechanics of lowering taxes.