The Trump tax and spending plan, now law, is primarily a tax cut for wealthier individuals, disproportionately funded by lower-income families. The bottom 20 percent of households may see a 2.9% reduction in income due to eliminated benefits like Medicaid and SNAP. Middle-class taxpayers encounter mixed results based on individual financial situations, such as deductions for overtime work or state and local taxes. In contrast, high-income earners are positioned to gain significantly from changes in the tax structure, resulting in an overall increase in their income.
The Penn Wharton Budget Model finds that the bottom 20 percent of households would see their income reduced by 2.9%, about $885, due to the tax plan.
Lower-income families are likely affected adversely by cuts to Medicaid and SNAP, which provide essential health insurance and nutrition assistance.
The middle class experiences mixed outcomes; benefits depend on individual circumstances, such as reliance on tips or home ownership in high tax areas.
High-income earners benefit significantly from the tax plan, as they would experience gains rather than losses in income under the new legislation.
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