Republican tax bill would reduce income of poorest Americans, analysis shows

The benefits of the GOP’s tax legislation, titled “The Big Beautiful Bill” are heavily skewed toward the richest households in the U.S., while reducing resources for the poorest, according to multiple analyses of the Republican proposition that recently passed the House of Representatives.

That’s because while the bill expands on the 2017 Tax Cuts and Jobs Act and benefits some home owners, there are also significant cuts to social safety net programs like Medicaid and the Supplemental Nutrition Assistance Program (SNAP). As such, low earners could wind up worse off.

An analysis by the Penn Wharton Budget Model (PWBM) finds that households in the first income quintile—those with a household income between $0 and $17,000—would lose around $1,035 next year, including cuts to those government programs. But the PWBM finds the losses could go further up the income scale, and many Americans who make less than $51,000 a year would see their after-tax income decrease if the legislation is passed as is. Households with incomes between $17,000 and $51,000 would lose $705, on average.

Meanwhile, the top 0.1%—those earning over $4.3 million—would have their taxes cut by more than $389,000 on average. The top 10% receives about 65% of the benefits of the legislation.

“On a dynamic lifetime basis, lower-income and all future households are worse off, despite positive economic effects,” the PWBM notes.

Analysis from a wide range of tax experts find similar results, including the nonpartisan Urban Institute’s Tax Policy Center (TPC), the Yale Budget Lab, the right-leaning Tax Foundation, and the left-leaning Institute on Taxation and Economic Policy.

Among many changes to the tax code, the bill would extend tax cuts made under an expiring 2017 law, raise the standard deduction, raise the cap on the state and local tax (SALT) deduction, and slash spending on Medicaid and SNAP. It adds at least $2 trillion—but likely much more—to the nation’s deficit, and the CBO estimates that millions of Americans would lose their health care coverage.

Most of the benefits flow to the wealthiest households, tax experts find. Raising the SALT cap, for example, would benefit “only very high earners,” according to the right-leaning Tax Foundation. “The top 20% of taxpayers would be the only group to meaningfully benefit,” the organization says.

All together, those earning $460,000 or more would enjoy around one-third of total benefits from the bill, TPC finds.

The dramatic tax cuts would further inflate the national deficit, just after ratings firm Moody’s downgraded the U.S.’s credit due to unsustainable debt levels. That dynamic has further shaken the bond market, sending yields to their highest levels in months. If yields remain elevated, that could have implications across the economy, including lowering stock valuations and increasing mortgage interest rates.

“Adding more than $3 trillion to the debt when our nation’s finances are already on an unsustainable path would be unwise,” says the non-profit Committee for a Responsible Budget.

This story was originally featured on Fortune.com