The top 1% stands to receive $1 trillion in tax cuts over a decade
A year after the One Big Beautiful Bill Act was signed into law on July 4, 2025, the American economic landscape has sorted itself into legible patterns of gain and loss. Corporations and high-income households have captured the largest share of the law's benefits, while millions of lower-income Americans face reduced access to food assistance and healthcare. This is the perennial tension of tax legislation made visible once more — the question of who bears the cost of prosperity, and for whom prosperity is actually designed.
- The top 1% of earners are on track to collect $1 trillion in tax cuts over a decade, while Amazon, Alphabet, Meta, and Tesla alone claimed $51 billion in breaks in a single year.
- Over 4 million people lost SNAP benefits as expanded work requirements swept in veterans, former foster youth, and the unhoused — groups previously shielded from the rules.
- Medicaid's reckoning is still arriving: new eligibility checks and work requirements set to begin in 2027 are projected to strip coverage from 5 to 10 million people.
- The clean energy sector absorbed a sharp blow — EV sales dropped 22% after federal tax credits vanished, and solar and wind investment incentives face accelerated elimination.
- Defenders call it a foundation for long-term growth; critics call it a transfer of wealth upward financed by cuts to the vulnerable — and a nonpartisan analyst says both are right.
Twelve months after President Trump signed the One Big Beautiful Bill Act on July 4, 2025, the law's winners and losers have come into sharp relief — divided largely along lines of income and economic sector.
At the top of the ledger, high-income households benefited from a permanent 37% top tax rate and a raised state and local tax deduction of $40,000 annually. The Institute on Taxation and Economic Policy projects the top 1% will receive $1 trillion in cuts over the next decade. Corporations fared similarly well, with restored bonus depreciation and immediate deductibility of R&D expenses driving $51 billion in combined tax breaks for Amazon, Alphabet, Meta, and Tesla in 2025 alone.
Other provisions offered targeted relief further down the income scale. Around 7 million tipped workers claimed an average $7,000 deduction, 28 million overtime workers averaged $3,100, and 34 million seniors over 65 accessed a new $6,000 bonus deduction. A new program called Trump Accounts provided $1,000 Treasury deposits for eligible newborns, with more than 6 million accounts opened by mid-2026.
The losses, however, landed hardest on lower-income Americans. New SNAP work requirements expanded to cover adults up to age 64 — including veterans, former foster youth, and people experiencing homelessness — and limited non-compliant recipients to just three months of benefits. The result: more than 4 million people dropped from the program, a 10% decline, by March 2026. Medicaid faces a slower but potentially larger contraction, with the Urban Institute estimating 5 to 10 million people could lose coverage when new requirements take effect in 2027.
The clean energy sector absorbed its own blow. The end of EV tax credits contributed to a 22% drop in electric vehicle sales in 2026, while rooftop solar, home efficiency, and corporate wind and solar credits face phaseouts or elimination.
The law's architects frame it as relief for working Americans paired with necessary program reform. Its critics argue the math tells a different story — one where cuts to programs serving the most vulnerable finance benefits flowing disproportionately upward. As major provisions affecting Medicaid and student loan borrowers continue to take hold through 2027, the full weight of those choices is still being felt.
Twelve months after President Trump signed the sweeping tax and spending legislation known as the One Big Beautiful Bill Act on July 4, 2025, the contours of who gained and who lost have become unmistakable. The law delivered substantial tax relief to millions of households and businesses while financing those cuts through reductions in federal spending on programs serving lower-income Americans. The result is a landscape of clear winners and losers, divided largely along lines of income and economic sector.
High-income households emerged as major beneficiaries. The law made permanent the top individual tax rate of 37 percent, preserving a benefit that primarily affects the wealthiest 2 percent of Americans—those earning over $640,000 individually or $768,000 as married couples. It also raised the state and local tax deduction from $10,000 to $40,000 annually, another provision that disproportionately helps affluent taxpayers. According to the Institute on Taxation and Economic Policy, the top 1 percent stands to receive $1 trillion in tax cuts over the next decade from the law's provisions.
Corporations captured substantial gains as well. The legislation restored and made permanent 100 percent bonus depreciation, allowing companies to immediately deduct the full cost of many investments rather than spreading deductions across multiple years. It also made domestic research and development expenses immediately deductible. The combined effect has been striking: Amazon, Alphabet, Meta, and Tesla together claimed $51 billion in tax breaks in 2025, much of it flowing from the new law's provisions.
Other winners included workers in specific categories. About 7 million workers claimed the "no tax on tips" deduction, with a typical deduction of $7,000, while 28 million people claimed the overtime deduction, averaging $3,100. Roughly 34 million seniors over 65 claimed a new $6,000 bonus deduction, subject to income limits. The law also created Trump Accounts, tax-advantaged investment vehicles for children that include a $1,000 Treasury deposit for eligible newborns born between January 1, 2025, and December 31, 2028. Treasury Secretary Scott Bessent reported that more than 6 million Americans had opened these accounts by mid-2026.
The losses, however, fell heavily on lower-income Americans and certain economic sectors. The law imposed sweeping new work requirements on SNAP recipients, expanding the rules to include adults aged 18 to 64—previously only those under 55 were subject to the requirement—and extending requirements to groups previously exempt, including veterans, former foster youth, and people experiencing homelessness. Those unable to meet work requirements receive only three months of benefits. The effect has been dramatic: SNAP participation dropped by more than 4 million people, a 10 percent decline, between the law's signing and March 2026. Smaller retailers that depend heavily on SNAP sales have seen revenue decline as a result.
Medicaid faces similar pressures. Beginning in 2027, the law introduces new work requirements and more frequent eligibility checks. The Urban Institute estimates these changes will reduce Medicaid enrollment by between 5 million and 10 million people. The clean energy sector has also suffered. The law ended federal tax incentives for electric vehicles and sunset some clean energy credits, including rooftop solar and home efficiency credits. It also accelerated phaseouts for corporate tax credits for solar and wind investments. Electric vehicle sales have fallen 22 percent in 2026 compared with the prior year, according to Cox Automotive.
The law's architects defend it as necessary and beneficial. White House spokesman Kush Patel characterized it as delivering "short-term economic relief while laying the groundwork for long-term economic growth," pointing to provisions like equipment expensing and a permanent 20 percent tax deduction for small businesses. Republican lawmakers argue the law provides relief to low- and middle-income families while reducing waste in federal programs. Democrats counter that the tax cuts, particularly those benefiting high-income households and corporations, are being financed by cuts to programs serving the most vulnerable. Andrew Lautz of the Bipartisan Policy Center observed that both characterizations contain truth: many provisions do target middle-class taxpayers, while others primarily benefit the wealthy. As major provisions affecting Medicaid and student loan borrowers take effect in the second half of 2026 and into 2027, the full scope of the law's impact will become clearer.
Citações Notáveis
Both can be true—many tax cuts are targeted at middle-class taxpayers, but many provisions primarily benefit the wealthy.— Andrew Lautz, director of tax policy, Bipartisan Policy Center
The top 1% are in line to get $1 trillion in tax cuts from the law over a decade.— Jon Whiten, deputy director, Institute on Taxation and Economic Policy
A Conversa do Hearth Outra perspectiva sobre a história
So a year in, we can actually see who benefited and who didn't. What surprised you most about how this played out?
That the gains were so concentrated. The top 1 percent getting $1 trillion over a decade—that's not subtle. And it happened while 4 million people lost food assistance.
The work requirements for SNAP seem to be the most immediate pain point. Do experts think those will actually push people into jobs, or are they just cutting people off?
There's genuine disagreement. Some researchers point to decades of evidence that work incentives can help families long-term, even affecting their children's outcomes. But others worry the three-month cutoff is too harsh—that it's punishment, not incentive. The 22 percent drop in EV sales suggests the law had unintended consequences too.
Why would ending EV tax credits hurt so much? Aren't those cars supposed to be cheaper now anyway?
The credits were the bridge. They made EVs competitive with gas cars for middle-income buyers. Without them, the price gap reopens. It's a clean energy sector that got caught in the tax-cutting machinery.
And Trump Accounts—those seem genuinely popular. Over 6 million opened already.
They are. A $1,000 Treasury deposit for newborns, tax-free growth—it's tangible and it appeals to parents thinking long-term. The Dells pledging $250 per child in lower-income areas adds another layer. But it's also a program that benefits families who can afford to save, which isn't everyone.
So the law is doing what it was designed to do—cut taxes, reduce spending on safety-net programs. The question is whether that's the right trade-off.
Exactly. And we won't know the full answer until 2027, when Medicaid work requirements kick in and we see if 5 to 10 million people actually lose coverage.