The bill includes deep Medicaid cuts, smaller SNAP reductions, and tax breaks favoring high-income households.
The top 20% of earners would gain an average of $6,055 per year under the Senate version of U.S President Donald Trump’s “One Big Beautiful Bill Act” bill, while the poorest Americans would lose nearly $700 annually, according to a new analysis by The Budget Lab at Yale University.
The report found that the bill’s tax cuts and social spending reductions would lead to a 2.2% boost in after-tax income for high earners, while the bottom 20% would see a 2.9% drop, amounting to a transfer of income up the income distribution ladder.
The income gap stems from a mix of provisions in the bill, including cuts to income tax rates and itemized deductions for wealthier households, alongside steep reductions in Medicaid and SNAP (food assistance), which disproportionately affect lower-income families.
The Senate bill is broadly similar to the House-passed “One Big Beautiful Bill Act,” but includes deeper cuts to Medicaid and minor cuts to SNAP.
Compared to the House version, the Senate’s proposal results in larger losses for the bottom quintile — $695 versus $600 — and slightly smaller average gains for the top 20%, at $5,735 versus $6,495.
A key amendment by Senator Rick Scott would reduce the federal match rate for Medicaid enrollees under the Affordable Care Act expansion, leading to an estimated $313 billion reduction in federal Medicaid spending over the next decade.
The Budget Lab noted the bill’s effects would become even more regressive if tariffs — floated by lawmakers as a way to fund tax cuts — are included in future versions.
While tariffs weren’t part of the current estimate, the group said previous modeling shows they disproportionately affect low-income households.
Trump’s allies in the Senate are pushing to finalize the bill ahead of the July 4 recess.
The Budget Lab’s projections cover average annual income changes between 2026 and 2034, adjusted to 2025 dollars.
Despite criticism, supporters argue the bill stimulates investment and rewards work.
However, the Yale study suggests its overall effect is to shift resources away from low-income families toward those at the top of the income scale.
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