Republican Tax Bill Harms the Poor and Benefits the Rich

• The bill leads to financial losses for the poorest Americans and increases income for the wealthy.
• The middle class will see moderate gains, but social programs are being cut.
• CBO estimates indicate a negative impact on the economy and a decrease in purchasing power.

This has been reported by Associated Press, ABC News.

Introduction to the Tax Bill

The Republican tax bill, approved by the U.S. House of Representatives, has a significant impact on the country’s economy. According to a new analysis published by the Congressional Budget Office (CBO), this bill will lead to annual losses for the poorest Americans of about $1,600, while the income of the wealthiest households will increase by an average of $12,000.

Impact on Different Social Strata

The middle class will benefit from gains of $500 to $1,000 per year. The income reduction for the poorest is linked to proposals to cut social programs, such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP) for low-income individuals.

New Requirements and Tax Benefits

The bill also proposes expanding work requirements for food assistance, as well as new "community engagement requirements" that mandate at least 80 hours per month of work, training, or service for adults without dependents to qualify for Medicaid. Some tax benefits, such as deductions for tips and overtime, will be temporary.

Impact Assessment of the Bill

Secretary of the Treasury Scott Bessent and other Republicans have attempted to discredit the CBO estimates, arguing that the U.S. could face an economic disaster if this bill is not passed. Idaho Senator Mike Crapo noted that the bill "recognizes that solving our debt crisis lies not in raising taxes but in reducing spending."

CBO Forecasts

The administration claims that the costs of the tax bill will be offset by revenue from tariffs. Recently, the CBO estimated that Trump’s tariff policy would reduce deficits by $2.8 trillion over 10 years, but would also lead to a shrinking economy, increased inflation, and decreased purchasing power for households.

Criticism Expressed

Democrat Brendan Boyle from Pennsylvania, who requested the CBO estimate, stated that "this will be one of the largest transfers of wealth from working families to the ultra-rich in American history."

Tags: USA/Politics/Economy