Trump’s tax law cuts income for the poorest 10% by $1,200 per year

The Congressional Budget Office (CBO) projected Monday that the poorest 10% of U.S. households will lose roughly $1,200 in resources each year under the new “One Big Beautiful Bill Act,” a hit equal to about 3.1% of their income. By contrast, households in the top 10% of earners are expected to gain around $13,600 annually, an increase of 2.7% in their income.

Those in the middle of the income distribution will see a smaller boost, with annual resources rising by an estimated $800 to $1,200 on average, the analysis found.

The CBO attributed the losses for lower-income families largely to cutbacks in social programs, while wealthier households benefit primarily from tax breaks and cash transfers. The Trump administration and its allies have recently criticized independent agencies for releasing estimates at odds with their policy messaging. The CBO, led by Phillip Swagel — who previously served under President George W. Bush — has been singled out for its growth outlooks.

The legislation, signed into law last month, enacts much of President Trump’s economic agenda. It extends his 2017 tax cuts and adds new or expanded breaks, such as raising the cap on state and local tax deductions, enhancing the child tax credit, and exempting tips and overtime pay from taxation. To offset some costs, the law reduces funding for clean energy initiatives and trims social programs including Medicaid and food assistance.

In a separate estimate, the CBO said the measure will add about $3.4 trillion to federal deficits over the next decade, not factoring in potential growth effects. Democrats and other critics argue the law disproportionately favors the wealthy while scaling back the social safety net at a time of economic slowdown and a weakening labor market, when such benefits would be most critical.