CBO Finds Trump Tax Bill Boosts Wealthy, Cuts Poorest Incomes

President Donald Trump's massive tax and spending bill, passed by the House, is projected by the Congressional Budget Office to reduce resources for the poorest Americans by about $1,600 annually, primarily due to cuts in Medicaid and food aid, while boosting incomes for the wealthiest households by roughly $12,000. The bill also proposes significant changes to the earned income tax credit (EITC), a crucial refundable tax break for low- and moderate-income workers, making it more difficult to claim and potentially causing delays, denials, and lost income for millions of families starting in 2028. Experts and some Democratic senators have expressed concerns that the EITC changes would complicate eligibility and enforcement, potentially harming the very workers the credit is designed to help. Additionally, the bill includes accelerated phase-outs and new restrictions on clean energy tax credits, such as the investment tax credit and production tax credit, which could impact renewable energy projects and foreign entities. These provisions collectively highlight a shift in fiscal policy that favors higher-income households and imposes new hurdles for lower-income Americans and industries reliant on tax incentives. The bill is expected to undergo further revisions as it moves to the Senate for consideration.