The US Big Beautiful Tax Bill Takes from American Poor and Gives to the Rich

23rd May 2025

The "Big Beautiful Tax Bill" is a sweeping tax and spending package recently passed by House Republicans, championed by former President Donald Trump. It extends tax cuts from his first administration, eliminates taxes on overtime work and tips, and increases military and border security funding.

However, the bill also introduces significant spending cuts, including reductions to Medicaid and food assistance programs like SNAP, which could impact millions of lower-income Americans. While it provides tax relief for seniors and incentives for domestic manufacturing, it is estimated to add trillions to the national debt.

The bill still needs Senate approval, where changes could be made before it becomes law. If passed, it would shape the financial landscape for American taxpayers, benefiting some while potentially creating hardships for others.

Here are some key concerns:

Cuts to Social Programs: The bill slashes Medicaid funding by nearly $700 billion, which could result in 7.6 million Americans losing health insurance over the next decade. It also reduces SNAP (food assistance) funding by $267 billion, affecting millions of low-income families.

Benefits Skewed Toward Wealthy Americans: While the bill extends tax cuts from 2017, analyses show that high-income earners benefit the most. Those making $1.1 million or more receive nearly a quarter of the total tax cuts, while lower-income households see little to no benefit.

Increase in National Debt: The bill is projected to add $2.3 trillion to the national debt over the next decade. This could lead to higher interest rates and economic instability.

Work Requirements for Medicaid: The bill introduces stricter work requirements for Medicaid recipients, requiring able-bodied adults to work at least 80 hours per month to qualify. Critics argue this could disproportionately affect vulnerable populations.

Temporary Tax Breaks: While the bill eliminates taxes on overtime pay and tips, these provisions expire after 2028, meaning workers may not see long-term benefits.

The bill still needs Senate approval, where changes could be made before it becomes law. If passed, it would reshape the financial landscape for American taxpayers—benefiting some while creating hardships for others.

The impact on low-income families
The Big Beautiful Tax Bill could have significant consequences for low-income families. Here are some key impacts:

Cuts to Medicaid: The bill proposes reducing Medicaid funding by $698 billion, which could result in 7.6 million Americans losing health insurance over the next decade2. Stricter eligibility checks and work requirements may make it harder for low-income individuals to qualify.

Food Assistance Reductions: The bill cuts SNAP (food stamps) funding by $267 billion, introducing new work requirements for recipients aged 55 to 642. This could make it more difficult for older low-income individuals to access food assistance.

Limited Child Tax Credit Access: While the bill raises the Child Tax Credit to $2,500 until 2028, new eligibility rules mean 4.5 million children—especially those in immigrant families—may lose access.

Losses in Household Income: Families earning under $50,000 annually could see financial losses due to cuts in assistance programs. Those making between $17,000 and $51,000 may lose around $700, while those earning less than $17,000 could lose over $1,0002.

Stricter Student Loan Rules: The bill eliminates graduate student loans and caps borrowing limits for undergraduates, making higher education less accessible for low-income students2.

Overall, while the bill provides tax breaks for some workers, its cuts to essential programs could create financial hardships for millions of low-income families. The bill still needs Senate approval, where changes could be made before it becomes law.

The Rich Are Winners
The Big Beautiful Tax Bill benefits several groups, primarily high-income earners and specific working-class sectors. Here's who gains the most:

High-Income Earners: Those making $217,000 or more annually receive the largest tax breaks, with nearly a quarter of total cuts going to individuals earning over $1.1 million.

Families with Children: The Child Tax Credit increases to $2,500 until 2028, but eligibility rules mean 4.5 million children may lose access.

Workers Earning Overtime: Overtime pay is no longer taxed, reducing federal revenue by up to $866 billion over the next decade.

Tipped Workers: Tips are exempt from taxation until 2028, benefiting waiters and service industry employees.

Car Buyers: A temporary tax deduction of up to $10,000 is available for American-made vehicle purchases.

Newborns: Babies born between 2025 and 2029 receive $1,000 in a government-backed investment account, known as a Trump Account.

While these groups benefit, the bill also introduces major spending cuts that could negatively impact low-income Americans. The bill still needs Senate approval, where changes could be made before it becomes law.