Will the new GOP tax bill cost you $1,600 a year? Here’s what the CBO says
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You may have heard recent discussions about the new Republican tax and spending bill, which supporters say will lower taxes, boost the economy, and, in the words of House Speaker Mike Johnson, usher in “a new golden age in America.”
A June 12 report from the nonpartisan Congressional Budget Office (CBO) offers additional perspective, highlighting how the bill could affect different income groups.
According to the analysis, the lowest-earning households may see a reduction in financial resources under the proposed changes.
For older adults, families on fixed incomes, and individuals who rely on federal assistance programs, the report’s findings have prompted further attention and discussion.
Let’s start with the numbers.
According to the CBO, the lowest-earning 10% of US households would see their annual financial resources drop by $1,600 on average—nearly 4% of their total income.
For people already budgeting every dollar, that’s not a small change—it’s the difference between paying bills or skipping meals.
In contrast, the highest-earning 10% would see their resources increase by $12,000 a year, thanks largely to tax cuts.
Middle-income households would get a modest bump of $500 to $1,000.
“The agency estimates that in general, resources would decrease for households toward the bottom of the income distribution, whereas resources would increase for households in the middle and top of the income distribution,” the report said.
Why the imbalance?
According to the CBO, the proposal includes a combination of tax cuts that would primarily benefit higher-income households and reductions in funding for federal programs such as Medicaid and SNAP (food stamps).
It also includes changes to how the federal government matches funds provided by states, which could affect the level of support available for local services.
As a result, while low-income households may see some tax relief, the potential reduction in benefits could offset those gains.
Also read: Will your Social Security checks get bigger? The truth behind the GOP tax bill
Supporters vs. critics: A familiar debate
President Trump has voiced strong support for the bill, and White House spokesman Kush Desai defended the administration’s approach in a statement to CBS News:
“President Trump’s America First economic agenda unleashed historic job, wage, and economic growth for working-class Americans in his first term, and this agenda will repeat the success in his second term.”
Desai also noted that critics may be overlooking the broader effects of the Trump-era tax cuts, which he said contributed to a decline in wealth inequality—though this remains a point of debate among economists.
Meanwhile, Treasury Secretary Scott Bessent and other Republicans have pushed back against the CBO’s methodology and insist that failing to pass the bill could hurt the economy.
But critics, including many Democrats and nonpartisan analysts, see things differently.
“As the nonpartisan [Congressional Budget Office] just confirmed to me, Trump’s budget bill will make it harder for working Americans to make ends meet while sending thousands to the ultra-rich,” said Rep. Brendan Boyle (D-Pa.), who—along with House Minority Leader Hakeem Jeffries—requested the CBO report.
“Republicans are stealing hard-earned money from working people to enrich billionaires,” Boyle added.
Also read: Millions may lose Medicaid—see which states are most affected
What other experts are saying
The CBO isn’t the only organization analyzing the potential effects of the bill.
The Penn Wharton Budget Model estimated that the bottom 20% of households could see an average loss of $1,035 by 2026, while the top 0.1% might receive an after-tax gain of $389,000.
Similarly, an analysis by the Yale Budget Lab projected that the lowest 10% of households would experience an average income decrease of more than 6.5%, compared to a 1.5% increase for higher-income earners.
These independent findings align with the CBO’s assessment, highlighting how the bill’s impacts may vary significantly across income levels.
Also read: “We’re going to reform it.” Will Social Security undergo more changes? Here’s what we know.
If you're over 60, living on a fixed income, or supporting family members who use programs like Medicaid or SNAP, it’s worth taking a closer look at how this legislation might affect those benefits.
Changes to federal funding could influence not just individuals, but also broader community services such as food banks, senior centers, and local hospitals.
Even for those not directly affected, shifts in how the government supports states may impact access to public services or result in increased costs at the local level.
Read next: Are you missing out? Find out if you qualify for Trump’s new senior tax break—and how much you could save
How do you feel about the proposed tax bill? Are you worried about reduced support for essential programs? Do you believe tax cuts will strengthen the economy—or only benefit the wealthy? Share your thoughts in the comments below.
At The GrayVine, we believe that understanding the impact of public policy—and supporting one another through it—is one of the best ways to stay empowered.
A June 12 report from the nonpartisan Congressional Budget Office (CBO) offers additional perspective, highlighting how the bill could affect different income groups.
According to the analysis, the lowest-earning households may see a reduction in financial resources under the proposed changes.
For older adults, families on fixed incomes, and individuals who rely on federal assistance programs, the report’s findings have prompted further attention and discussion.
Let’s start with the numbers.
According to the CBO, the lowest-earning 10% of US households would see their annual financial resources drop by $1,600 on average—nearly 4% of their total income.
For people already budgeting every dollar, that’s not a small change—it’s the difference between paying bills or skipping meals.
A new tax and spending proposal is drawing attention for how it could affect Americans at different income levels, with recent reports highlighting potential changes to household finances. Image Source: Pexels / Nataliya Vaitkevich.
In contrast, the highest-earning 10% would see their resources increase by $12,000 a year, thanks largely to tax cuts.
Middle-income households would get a modest bump of $500 to $1,000.
“The agency estimates that in general, resources would decrease for households toward the bottom of the income distribution, whereas resources would increase for households in the middle and top of the income distribution,” the report said.
Why the imbalance?
According to the CBO, the proposal includes a combination of tax cuts that would primarily benefit higher-income households and reductions in funding for federal programs such as Medicaid and SNAP (food stamps).
It also includes changes to how the federal government matches funds provided by states, which could affect the level of support available for local services.
As a result, while low-income households may see some tax relief, the potential reduction in benefits could offset those gains.
Supporters vs. critics: A familiar debate
President Trump has voiced strong support for the bill, and White House spokesman Kush Desai defended the administration’s approach in a statement to CBS News:
“President Trump’s America First economic agenda unleashed historic job, wage, and economic growth for working-class Americans in his first term, and this agenda will repeat the success in his second term.”
Desai also noted that critics may be overlooking the broader effects of the Trump-era tax cuts, which he said contributed to a decline in wealth inequality—though this remains a point of debate among economists.
Meanwhile, Treasury Secretary Scott Bessent and other Republicans have pushed back against the CBO’s methodology and insist that failing to pass the bill could hurt the economy.
But critics, including many Democrats and nonpartisan analysts, see things differently.
“As the nonpartisan [Congressional Budget Office] just confirmed to me, Trump’s budget bill will make it harder for working Americans to make ends meet while sending thousands to the ultra-rich,” said Rep. Brendan Boyle (D-Pa.), who—along with House Minority Leader Hakeem Jeffries—requested the CBO report.
“Republicans are stealing hard-earned money from working people to enrich billionaires,” Boyle added.
Also read: Millions may lose Medicaid—see which states are most affected
What other experts are saying
The CBO isn’t the only organization analyzing the potential effects of the bill.
The Penn Wharton Budget Model estimated that the bottom 20% of households could see an average loss of $1,035 by 2026, while the top 0.1% might receive an after-tax gain of $389,000.
Similarly, an analysis by the Yale Budget Lab projected that the lowest 10% of households would experience an average income decrease of more than 6.5%, compared to a 1.5% increase for higher-income earners.
These independent findings align with the CBO’s assessment, highlighting how the bill’s impacts may vary significantly across income levels.
Also read: “We’re going to reform it.” Will Social Security undergo more changes? Here’s what we know.
If you're over 60, living on a fixed income, or supporting family members who use programs like Medicaid or SNAP, it’s worth taking a closer look at how this legislation might affect those benefits.
Changes to federal funding could influence not just individuals, but also broader community services such as food banks, senior centers, and local hospitals.
Even for those not directly affected, shifts in how the government supports states may impact access to public services or result in increased costs at the local level.
Read next: Are you missing out? Find out if you qualify for Trump’s new senior tax break—and how much you could save
How do you feel about the proposed tax bill? Are you worried about reduced support for essential programs? Do you believe tax cuts will strengthen the economy—or only benefit the wealthy? Share your thoughts in the comments below.
At The GrayVine, we believe that understanding the impact of public policy—and supporting one another through it—is one of the best ways to stay empowered.
