GOP tax bill would cost poor Americans $1,600 a year and boost highest
earners by $12,000, CBO says
[June 13, 2025]
By FATIMA HUSSEIN
WASHINGTON (AP) — The Republican tax bill approved by the U.S. House of
Representatives would cost the poorest Americans roughly $1,600 a year
while increasing the income of the wealthiest households by an average
of $12,000 annually, according to a new analysis released Thursday by
the Congressional Budget Office.
Middle-income households would see a boost of roughly $500 to $1,000 per
year under Republican President Donald Trump's tax bill, the CBO found.
The cuts to the lowest-income households come from proposed cuts to
social safety net programs including Medicaid and a food assistance
program for lower-income people, known as Supplemental Nutrition and
Assistance Program.
The bill also proposes expanding work requirements to receive food aid
and new “community engagement requirements” of at least 80 hours per
month of work, education or service for able-bodied adults without
dependents to receive Medicaid. Some proposed tax breaks would be
temporary, including a tax break on tips and overtime, car loan interest
and a $4,000 increase in the standard deduction for seniors.
Treasury Secretary Scott Bessent and other Republicans have sought to
discredit the CBO's analyses of the bill and say that the U.S. could
head toward economic catastrophe if the measure is not passed. GOP Idaho
Sen. Mike Crapo said during a Senate Finance Committee hearing on
Thursday that the tax bill "recognizes the solution to our debt crisis
is not to tax Americans more, it is to spend less.”
“The legislation recognizes that extending proven tax reform is critical
for working families," he said.
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House Speaker Mike Johnson, R-La., attends a signing event for a
bill blocking California's rule banning the sale of new gas-powered
cars by 2035, in the East Room of the White House, Thursday, June
12, 2025, in Washington. (AP Photo/Alex Brandon)
Administration officials have said the the cost of the tax bill
would be offset by tariff income. Recently, the CBO separately
estimated that Trump's sweeping tariff plan would cut deficits by
$2.8 trillion over a 10-year period while shrinking the economy,
raising the inflation rate and reducing the purchasing power of
households overall.
The CBO was established more than 50 years ago to provide objective,
impartial analysis to support the budget process. It is required to
produce a cost estimate for nearly every bill approved by a House or
Senate committee and will weigh in earlier when asked to do so by
lawmakers.
The office's analysis released Thursday considers Trump’s “One Big
Beautiful Bill Act” in isolation, excluding the potential impact of
the tariffs that Trump has imposed and paused on nations around the
world.
Democratic Rep. Brendan Boyle of Pennsylvania, who requested the CBO
analysis released Thursday, said in a statement that "this would be
one of the largest transfers of wealth from working families to the
ultra-rich in American history. It’s shameful.”
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