A recent analysis from the Congressional Budget Office (CBO) reveals that a new Republican tax and spending package could significantly benefit the wealthiest Americans while leaving lower-income families worse off. The report comes as the bill, which includes over $3 trillion in tax cuts and approximately $1 trillion in spending reductions, moves from the House of Representatives to the Senate.
According to the CBO, the top 10% of earners in the U.S. would see the largest gains from this legislation. Families in this group, earning an average of $692,000 annually, could save about $12,000 each year, which is roughly 2.3% of their income. In contrast, middle-income families, those making between $86,000 and $107,000, would receive much smaller benefits, with average savings ranging from $500 to $1,000, or less than 1% of their income.
The situation is even more challenging for families at the lower end of the income scale. Those earning around $23,000 a year could see an average loss of $1,600 annually, translating to a 3.9% decrease in their income. The CBO noted that for many of these families, cuts to government benefits like Medicaid and food stamps would outweigh any tax savings they might receive.
CBO Director Phillip Swagel emphasized that the effects of the bill would not be evenly distributed. He pointed out that households at the bottom of the income ladder would face decreasing resources, while those in the middle and upper tiers would see an increase.
This tax and spending package, which has received strong support from President Trump, passed the House last month and is now under consideration in the Senate. As lawmakers debate the bill, the implications for various income groups are becoming clearer, raising concerns about the fairness of the proposed changes.