GOP Tax Bill Hurts the Lowest Earners, Helps the Richest

New York Times: “The Penn Wharton estimate sought to analyze the full scope of the Republican tax package, computing the effects of the tax cuts as well as the plan to pay for them by slashing federal spending on other programs, including Medicaid and food stamps. Combined, those policies could fall disproportionately on the poorest, including those near or below the poverty line, the economists found.”

“People making between about $51,000 and $17,000 could lose about $700 on average in after-tax income beginning in 2026, according to the analysis, when factoring in both wages and federal aid. That reduction would worsen over the next eight years. People reporting less than $17,000 in income would see a reduction closer to $1,000, on average, also increasing over time, a shortfall that underscores their reliance on federal benefits.”

“By contrast, the top 0.1 percent, including those with incomes over $4.3 million, would gain on average more than $389,000 in after-tax income in 2026, the data show. These earners benefit more from a Republican measure because it cuts taxes on the wealthy and makes other favorable changes, including for businesses, which may improve the value of their investments.”