The biggest losers in the tax bill: Senate edition
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Low-income Americans are looking like the losers in the Senate version of President Trump's signature tax bill.
Why it matters: While some of Trump's preferred tax breaks for the working class made it through, other cuts still outweigh those wins, progressives and advocates for the poor argue.
Zoom in: The Senate version proposes new deeper cuts to Medicaid, which provides health insurance to 83 million low-income adults and their children.
- It includes new work requirements for parents of kids ages 15 and over to qualify for Medicaid. The House bill exempted all adults with dependents.
- Research shows the red tape that comes with these policies often lead even those who qualify to lose benefits.
Follow the money: The Senate version makes permanent a whole range of temporary tax cuts, but it does not extend enhanced tax credits that help low- to moderate-income Americans pay for insurance with the Affordable Care Act.
- 4.2 million could become uninsured as a result, according to the Congressional Budget Office.
- Millions more will face higher healthcare costs, says Sharon Parrott, president of the liberal Center on Budget and Policy Priorities.
Plus: Millions of lower-income parents who count on the earned income tax credit would have to comply with new paperwork requirements to receive the tax break.
- The Senate proposes $2,200 per child, a smaller increase than the House to the child tax credit. Millions of lower-income families will not benefit from the increase because of the way the credit is structured.
Flashback: Resources for households in the bottom 10% would decrease by $1,600 per year, about 4% of their income, per a Congressional Budget Office analysis of the House-passed version of the bill.
- For the top households, resources would increase by $12,000.
- No similar analysis has been done for the Senate version yet.
Between the lines: The Senate version doesn't actually change this broad distributional effect. "It is an enormous transfer from people with low and middle income to people with high incomes," Parrott says.
The intrigue: There's more to like in here if you're wealthy.
- For example, the bill increases the exemption for the estate tax to $15 million per spouse, indexes it to inflation and makes it permanent.
Reality check: The rich didn't exactly get everything they want in the Senate bill. For example, it takes the $40,000 deduction on state and local taxes from the House version and cuts it back to the current $10,000.
The other side: Republicans argue they are rightsizing Medicaid to cover those who are supposed to get coverage as the policy originally intended.
- "President Trump pledged to protect Medicaid, eliminate taxes on tips and overtime, slash wasteful spending, extend his historic 2017 tax cuts, and implement pro-growth policies to in usher in the historic job, wage, investment, and economic growth that Americans experienced during his first term," White House spokesman Kush Desai said.
- "The One, Big, Beautiful Bill will do just that."
What to watch: This is just the latest version. Republicans are still working out details, notably around Medicaid, which has grown a lot more popular.
