A new analysis from the Congressional Budget Office shows the top 10% of earners in the U.S. would see the biggest gains from the House-passed tax and spending package. Those at the bottom of the income ladder would be worse off.
Saul Loeb/AFP via Getty Images
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Saul Loeb/AFP via Getty Images
The nation’s highest-paid workers would be the biggest winners from a massive Republican tax and spending bill, according to a new analysis from the Congressional Budget Office.
Middle-income families would see smaller gains while those at the bottom of the income ladder would be worse off.
The non-partisan CBO tried to forecast the combined effects of the more than $3 trillion in tax cuts that are included in the bill, along with about $1 trillion in reduced government spending on programs like Medicaid and food stamps. The bill, which President Trump has strongly championed, passed the House last month and is now being considered by the Senate.
The tax cuts deliver the biggest savings for top earners and more modest gains for those with average incomes, the CBO found. For families making less than about $55,000 a year, the cutbacks in government benefits typically outweigh any tax savings, leaving them with a net loss.
“The changes would not be evenly distributed among households,” CBO director Phillip Swagel wrote in a letter to lawmakers. “In general, resources would decrease for households towards the bottom of the income distribution, whereas resources would increase for households in the middle and top of the income distribution.”
The biggest winners in the CBO’s analysis are families in the top 10% of household income, earning an average of $692,000 a year. On average, they’d see annual savings of about $12,000 or 2.3%.
Middle-income families earning between $86,000 and $107,000 would see average annual savings between $500 and $1,000, or less than 1%. And families on the bottom rungs of the income ladder, earning around $23,000 a year, would see an average loss of $1,600 each year, or 3.9%.
