House republican “Big Beautiful” tax favors the rich

There is a clear contrast between the impact on people with high earnings and those on low -income households in Extensive legislative package Republicans of the Chamber Thursday has passed.

Most of the financial benefits in the regulations – called “One Big Beautiful Bill Act” – It flows to the richest Americans, courtesy of tax -lowering funds, such as those for business owners, investors and House owners in high tax areasExperts said.

They said, however, that the low earners would be worse. This is mainly because the Republicans will partially compensate for these tax reductions – estimated cost about $ 4 trillion or more – z reduction to net security programs such as Medicaid and Complementary help programor Snap, previously known as food vouchers.

The tax package and expenses now sets off to the Senate, where he can face further changes.

Congress Budget Office, impartial federal result, estimates Income for the lowest 10% of households would fall by 2% in 2027 and by 4% in 2033 as a result of account changes.

On the other hand, persons in the top 10% would have an increase in income from legislation: 4% in 2027 and 2% in 2033 CBO was found.

Yale budget laboratory analysis He found similar dynamics.

In the lowest 20% of households – which earn less than USD 14,000 a year – would cause their annual income to fall on average around USD 800 in 2027, it is estimated on average.

In 20% – which earn over USD 128,000 a year – would cause them to increase them by an average of 9,700 USD in 2027. 1% would gain USD 63,000.

Yale and CBO analyzes do not take into account the last minute changes in the Chamber’s legislation, including more severe requirements for Medicaid work.

“He is very distorted in the direction of the rich,” said Ernie Tedeschi, economy director at Yale’s budget laboratory and former chief economist at the Council of Economic Advisors of the White House during Biden administration.

Legislation is related Regression nature Economists said that about the recent Trump’s tariff policy.

“If you turned on [Trump administration’s] Wandering with tariffs, it would be even more distorted with lower and workers’ families- said Tedeschi.

Experts say that these tax breaks disproportionately flow to high earners. For example, the lowest 80% of earners He wouldn’t see any benefits According to the Tax Foundation, from the house proposal to raise a salt cap to USD 40,000 from the current USD 10,000.

More of personal finances:
The tax account includes $ 1000 bonus for children in “Trump accounts”
The House Act increases the maximum tax relief for children to USD 2,500
Food vouchers are facing “the biggest cut in the history of the program”

The bill also maintains a lower highest tax rate of 37%, determined on the basis of the Act on tax reductions and jobs in 2017, which would expire at the end of the year.

It maintains intact tax relief, which allows investors to protect capital profits from tax by directing money to “possibilities zones”.

The Trump’s tax law from 2017 has created this tax relief in order to encourage investment in areas with lower income designated by state governors. Taxpayers with capital profits are “very focused” among the wealthy, According to to the Tax Policy Center.

It is said that 60% of account reductions would reach 20% of the main households, and more than a third would go to people earning $ 460,000 or more, According to to the Tax Policy Center.

“The diversity between income groups is striking,” said the analysis.

Lower people are to take advantage of the regulations, including a higher standard deduction and temporarily improved Tax relief for childrenand tax breaks related to Income from tips And for example, interest on a car loan was said by experts.

However, some of these benefits may not be as valuable as at first glance, experts said. For example, about a third of tip employees do not pay federal income tax, said Tedeschi. He said that they would not benefit from the proposed tax relief about the instructions – this is structured as a tax deduction, which does not benefit households without tax liabilities.

Meanwhile, households with lower income, which rely more on federal net safety programs, saw cuts in Medicaid, Snap and benefits related to student loans and bonuses of the Act on inexpensive care, said Kent Smetters, economist and director of the Department at Penn Wharton Budget Model.

A home account, for example, would impose work requirements for Medicaid and SNAP beneficiaries. Total federal expenses on these programs would fall by about $ 700 billion and $ 267 billion by 2034, accordingly, in accordance with the analysis of the budget office of the Congress.

To say: “If you have low income and you don’t get SNAP, Medicaid or ACA support, you’ll be a bit better,” said Smetters.

He said that 10% of the main households pay about 70% of all federal taxes. According to Penn Wharton, such households would receive about 65% of the total legislation analysis Published Monday.

According to the Tax Policy Center, he would pay a summary of taxes that would pay more tax that earn at least $ 1.1 million a year.

“This is partly due to the restriction of the ability of some casings of companies to fully deduct state and local taxes and the limit of all deductions for households in the highest shelf,” Howard Glectman, an older employee in tax policy.

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