(Bloomberg) — The Senate’s version of President Donald Trump’s proposed tax cut bill will cost the bottom 20% of taxpayers an average of $560 a year while giving an average boost of $6,055 to those at the top end.
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That analysis from economists at the Budget Lab at Yale University bolsters Democratic critiques that the bill takes money out of the pockets of the working poor to give tax cuts to the rich.
The uneven distribution of the bill’s costs and benefits comes from a mix of tax and spending provisions. While the poorest taxpayers bear the brunt of cuts to Medicaid and the Supplemental Nutrition Assistance Program, those at the top end of the income charts would get the biggest benefit of the tax cuts, including income rate cuts and an expanded state and local tax deduction.
A proposal by Republican Senator Rick Scott of Florida would cut Medicaid even further. But the Budget Lab, a nonpartisan policy research group, cites economic studies showing that a little more than half of changes to the federal-and-state-funded health insurance program fall on providers rather than enrollees. And it assumes that states will pick up part of the cost of the social safety net programs, replacing about 1% of the income that the poorest families would have lost.
That proposal, if approved by the Senate during an ongoing voting session, could be added to the final bill. Senators are in the final stages of approving Trump’s tax bill in a bid to get it to the president’s desk by July 4.
The analysis excludes the effects of tariffs, which Senate negotiators have floated as a potential way to pay for income tax cuts. The Budget Lab said the bill would be even more regressive if tariffs were included.
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