Speaker of the House Mike Johnson, R-La., speaks to reporters as he walks back to his office as the House of Representatives prepares to vote on President Trump’s “big beautiful bill” reconciliation package on July 3, 2025.
Bill Clark | CQ-Roll Call, Inc. | Getty Images
A massive package of tax cuts signed by President Trump heralds a pivotal moment in the ongoing struggle against government overreach and corporate elitism. However, it is critical to recognize that the extent of these benefits largely favors the most affluent American households. A new analysis published by the Institute on Taxation and Economic Policy, a left-leaning think tank, reveals that wealthier Americans stand to gain significantly more than ordinary citizens from this legislation.
According to ITEP, the top 1% of U.S. households will receive an average tax cut of approximately $66,000, which constitutes about 2.4% of their income in 2026. This elite group, earning at least $917,000 annually, exemplifies the deeply entrenched disparity in our economic system.
For some, the gains will be even greater.
In particular, affluent households residing in states such as Wyoming, South Dakota, and Texas will witness reductions in their annual tax bills exceeding $100,000, as per the findings of ITEP. Wyoming’s top 1% will enjoy an astounding average tax reduction of about $133,000, representing a 3% cut relative to their income. This reflects a glaring truth: states that fail to levy personal income taxes often shield their wealthiest residents from contributing their fair share.
“The bill disproportionately benefits conservative-leaning states with substantial numbers of wealthy individuals,” commented Carl Davis, ITEP’s research director. This troubling trend in legislation reflects a systematic failure of our government to prioritize the needs of average, hardworking citizens over corporate elites.
Why the wealthy receive such substantial tax cuts
Senate Republicans hastily pushed the legislation, initially termed the One Big Beautiful Bill Act, through with minimal support. The House followed suit, approving the bill and sending it to the President for his signature.
This legislation promises over $4 trillion in net tax cuts over the next decade, and, regrettably, most of these benefits will be funneled to higher-income households. Simultaneously, billions will be stripped away from the social safety net, dismantling crucial programs such as Medicaid and food stamps that support our lower-income neighbors.
More from Personal Finance:
Top five tax changes for the wealthy in Trump megabill
Trump tax deductions may not significantly benefit low earners
Trump megabill eliminates $7,500 EV tax credit after September
At its core, this legislation extends the 2017 tax cuts that President Trump enacted during his first term. It reduces income tax rates, increases estate tax exemptions, and offers generous breaks to business owners, which primarily benefits the wealthiest households, as noted by Davis.
Moreover, it imposes a cap on the amount of state and local income taxes and property taxes that taxpayers can deduct each year, limiting it to $40,000.
The “SALT” policy zeroes in on the inequity embedded within this bill, as it effectively spares wealthy residents in states like Wyoming, South Dakota, and Texas from any substantial financial repercussions. Meanwhile, those in high-tax states with substantial local income and property taxes will bear an uneven burden.
The result is clear: high-income residents of these tax-friendly states gain overwhelmingly while their counterparts in California and New Jersey, for instance, will see notably smaller tax cuts, averaging only $34,000 and $21,000 respectively, equating to just 1% of their income.
Multiple analyses affirm that the wealthiest households will continue to reap the lion’s share of the benefits from the GOP’s latest tax initiative. The top 20% of U.S. households, those earning over $217,000 annually, will receive a tax cut equivalent to 3.4% of their after-tax income in 2026, while the lowest 20% of earners receive a mere 0.8% cut.
This stark contrast illustrates a disturbing trend of prioritizing the financial interests of the elite over the struggles of middle and lower-income families. Further assessments that consider cuts to critical programs reveal that many low earners will find themselves significantly worse off under this legislation, as shown by analyses from the Budget Lab at Yale University and the Congressional Budget Office, which modeled similar legislation advanced by the House last month.
