WASHINGTON – A new assessment by the Congressional Budget Office (CBO) reveals significant disparities in the impact of the U.S. House of Representatives’ approved Republican tax bill, with financial consequences varying widely across different income groups. The analysis, made public on Thursday, indicates that under this legislation, the lowest-income Americans would bear the burden of approximately $1,600 annually. Meanwhile, households with the highest earnings stand to gain an average of $12,000 per year. For those in the middle-income bracket, the predicted enhancements range from $500 to $1,000 annually.
The bill, championed by Republican President Donald Trump, suggests reducing funding for social programs that aid lower-income groups, such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP), known widely as food stamps. These savings are part of the efforts to facilitate the tax cuts. Additionally, the bill outlines revamped qualifications for assistance, including mandatory work or community engagement of 80 hours monthly for able-bodied adults without dependents to qualify for Medicaid. Proposed tax benefits under this legislation include temporary provisions like deductions on tips, overtime, and car loan interests, alongside a $4,000 increase in the standard deduction for seniors.
Despite the support from the Republican camp, Treasury Secretary Scott Bessent and others have criticized the CBO’s findings, cautioning against a predicted economic downfall should the bill not be implemented. In defense of the plan, Senator Mike Crapo of Idaho asserted during a Senate Finance Committee session that reducing government expenditure, not increasing taxes, is key to addressing the national debt issue. He emphasized the bill’s importance for tax reform as a boon for working families.
Administration officials argue that revenue from imposed tariffs could counterbalance the tax bill’s cost. The CBO previously estimated that Trump’s comprehensive tariff strategy would potentially decrease deficits by $2.8 trillion over a decade, albeit with negative repercussions such as a decelerated economy, heightened inflation, and reduced household purchasing power.
The CBO, tasked with delivering unbiased analyses to guide budget considerations, developed its latest report on Trump’s “One Big Beautiful Bill Act” without factoring in the wider implications of ongoing global tariffs. This evaluation serves as part of its obligatory duty to provide cost assessments for virtually all bills emerging from House or Senate vetting.
Democratic Representative Brendan Boyle of Pennsylvania, who had requested the CBO’s recent report, criticized the findings, calling the potential redistribution of wealth toward the affluent a historic detriment to working families. In a statement, he decried the legislative proposal as one of the most substantial economic imbalances in U.S. history.