How the GOP budget bill will make the rich richer and the poor poorer, according to a nonpartisan analysis

The biggest winners of the Republican-backed spending bill are the wealthiest Americans, a new analysis from the Congressional Budget office shows, while the biggest losers are the poorest.

The average U.S. household would be better off financially under the bill’s policies, the CBO found, but the benefits would not be evenly distributed. The wealthiest households would get the biggest boost, while the poorest would be worse off, the analysts said Thursday.

The U.S. House of Representatives passed the bill last month by one vote, with all Colorado Republicans voting for it and all Democrats voting against it. The Senate is now considering it. 

Republicans have celebrated the tax cuts in the bill and downplayed the impact of the spending cuts. The new CBO analysis shows that, taken together, the tax and spending cuts in the bill would fall disproportionately on the poorest people.

The Congressional Budget Office is a nonpartisan, independent agency that is part of the legislative branch and tasked with providing lawmakers with economic analysis. For this review, the office analyzed the impact on households across different income levels of the bill’s roughly $3 trillion in tax cuts and about $1 trillion in spending cuts on programs like Medicaid and food stamps.

The tax cuts would mostly benefit the wealthiest households, with only moderate benefits for low-income earners, the analysis found. The spending cuts would overwhelmingly hurt low-income households, wiping out any gains from the tax cuts.

The richest 10% of American households, making about $692,000 on average, would get an average 2.3% bump in their income over 10 years, or about $12,000.

Middle-income households, earning between $86,000 and $107,000 on average, would get an average 0.5% to 0.8% bump in their income over 10 years, or about $500 to $1,000.

And the poorest 10% of households, making about $23,000 on average, would lose about 4% of their income over 10 years, or about $1,560, almost exclusively because of cuts to programs like Medicaid and food stamps.

Households with an average income of about $56,000 or less would lose money over the next 10 years because the cuts to spending would outweigh any gains from the tax cuts, the analysis found.

Delanie Bomar, a spokesperson for Fort Lupton Republican Rep. Gabe Evans, said via email that the tax cuts in the bill would benefit the people of Congressional District 8 and save the average family money.

Twenty-four percent of households in District 8 had an income of less than $50,000 in 2023, according to Census estimates.

In a statement, Republican Rep. Jeff Crank of Colorado Springs, who represents District 5, said without the tax cuts, average taxpayers in his district would see a tax hike.

“Not passing this crucial legislation would devastate Colorado and the hardworking families in my district,” he said.

Twenty-five percent of households in District 5 had an income of less than $50,000 in 2023, Census estimates show.

Spokespeople for Republican Reps. Lauren Boebert of Windsor and Jeff Hurd of Grand Junction did not respond to requests for comment. Twenty percent of households in Boebert’s district, District 4, and 35% in Hurd’s district, District 3, had incomes of less than $50,000 in 2023, according to the Census.

The new CBO analysis echoes findings from the left-leaning Colorado Fiscal Institute that the tax cuts would benefit wealthy Coloradans most.

“The data is really clear that, contrary to what the GOP is saying, this bill fundamentally remakes the way we do government in the United States,” CFI Executive Director Kathy White said. “It shuffles massive tax breaks to the wealthy and it pays for that by stripping health care, food assistance and other critical programs from working-class people.”

Aspects of the spending cuts, if passed, would require state lawmakers to take the state budget back to the drawing board in a special session. White said Colorado would be uniquely challenged to keep its budget intact because of the Taxpayer’s Bill of Rights, the cap on government growth and spending in the state’s constitution.

“We can’t use our own sources to make up for what the federal government takes away,” she said. “Our people will bear the brunt of that pain more than other states.”