Trump Tax Law Analysis Shows Rich Gain Thousands While Poor Lose Benefits

WASHINGTON D.C. — A new report from the Congressional Budget Office reveals that the recently passed “One Big Beautiful Bill,” signed into law by President Donald Trump on July 4, 2025, will significantly benefit high-income earners while reducing financial support for the poorest Americans. According to the nonpartisan analysis, the top 10 percent of income earners will gain an average of $13,622 annually, while the bottom 10 percent will lose about $1,214 each year.

“This law delivers substantial tax relief for hard-working Americans,” Trump said during a campaign rally promoting the legislation. While the president highlights cuts such as the elimination of taxes on tips and overtime pay, the CBO analysis shows these measures come with steep reductions in essential programs like Medicaid and SNAP.

The law extends provisions from the 2017 tax cuts, boosts the state and local tax deduction cap to $40,000 temporarily, increases the child tax credit, and introduces a $6,000 senior deduction. These changes heavily favor higher-income households, with the top decile receiving approximately $14,700 in annual tax breaks. After accounting for reduced benefits, their net yearly gain stands at more than $13,600.

Low-income households face a different outcome. The bottom decile receives a small tax cut of $119, but this is overshadowed by an average loss of nearly $1,500 annually in federal and state assistance. The CBO estimates that roughly 10 million Americans could lose Medicaid coverage as a direct result of the legislation’s provisions.

The financial impact improves slightly for middle-income households. The second income decile will lose about $400 each year. The third decile breaks even with a $23 average gain. From the fourth through sixth deciles, annual benefits range from $379 to about $1,200. Upper-middle earners in the eighth and ninth deciles see benefits exceeding $2,200 and $3,200 respectively.

Income bracket thresholds provided by the CBO earlier this year place the bottom decile at $38,843 or less in annual household income. The highest decile includes those earning more than $517,699 per year.

The bill’s passage with only Republican support has drawn sharp criticism from Democrats, who requested the CBO report. They argue the legislation disproportionately favors wealthy Americans while stripping away safety nets for those in need. Supporters counter that the bill promotes economic growth by lowering tax burdens and encouraging investment.

Federal deficit concerns are also rising. The CBO projects the law will increase the national debt by up to $2.8 trillion over the next decade. Economists and policy advocates warn of long-term consequences for both economic equity and fiscal sustainability.

“This is a reverse Robin Hood policy,” said Sharon Parrott, president of the Center on Budget and Policy Priorities. “It hands massive tax breaks to the rich while pulling the rug out from under millions who depend on Medicaid and food assistance.”

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