Republican bill will redistribute wealth upwards: CBO

Republicans’ tax-and-spending cut bill will take from the poor and give to the rich, Congress’s official scoring body has found.

The Congressional Budget Office (CBO) found in a Tuesday analysis that the Americans who make the least amount of money will lose household resources as a result of President Trump’s “big, beautiful bill” while Americans who make the most will gain resources.

The CBO estimate shows that losses on a percentage basis in the lowest decile, or tenth, of earners are likely larger than the gains in the top tenth. 

Losses for low earners will be 2 percent in 2037 and then 4 percent in 2029, 2031 and 2033. Meanwhile, gains for the top earners will be 4 percent in 2037, 3 percent in 2029, 1 percent in 2031 and 2 percent in 2033.

The reason for the lower-income losses will be reductions in federal healthcare and food assistance. About 8.6 million people will lose access to health insurance as a result of the bill and about 3 million people will lose access to food stamps, according to the CBO.

The reason for the upper-income resource gains is mostly reductions in taxes.

The CBO’s distributional findings echo those of the Joint Committee on Taxation (JCT), the official tax-scoring body of Congress.

JCT found that of the $568.7 billion in 2027 tax reductions resulting from the bill, $384.6 billion – more than a full two thirds of the total tax reduction – will go to the top fifth of earners.

Median household income in the U.S. is about $80,000 a year. The middle fifth of earners will see $49.6 billion in tax reductions. That’s about 8.8 percent of the total tax cuts in 2027, compared to the 68 percent received by the top fifth.

The bill would be a major boost for people making between $200,000 and $500,000 a year. They will pay $169.5 billion less in taxes in 2027 — a full 30 percent of the total tax reductions for that year.

Broken down another way, people in the 95th to 99th percentile will see a $117.2 billion tax reduction — that’s more than 20 percent of the total cuts in 2027 for just that slice of the population.

The CBO has yet to publish a full cost estimate of the bill but has tallied up the major portions.

The Agriculture Committee, which oversees food stamps, will see to $238 billion in budget cuts. The Energy and Commerce Committee, which oversees large parts of the federal health care system, will deliver $987 billion in budget cuts. The Education and Workforce Committee will see to about $350 billion in cuts.

The Ways and Means Committee, which oversees taxes, will add about $3.8 trillion to the deficit in tax cuts.

The CBO is still calculating interactions between these variation tranches of budget and tax cuts which could add significantly more to the deficit than the $2.3 trillion suggested by a line-item tally.