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The Trump administration’s policies represent a historic transfer of national wealth and resources to the top 1%. The scope and degree of this take from everyone else to give to the very rich policymaking was revealed in a new study by the Center For American Progress (CAP).
The combination of new tariffs announced by the Trump administration in 2025 and new policies implemented in the One Big Beautiful Bill Act (OBBBA) will cause Americans’ incomes after taxes and transfers to decrease across the board in 2027, relative to 2025. Indeed, only the top 1 percent of U.S. households by earnings will see an increase. Despite some lawmakers’ attempts to rebrand the bill as a “working families tax cut,” middle-income households will experience a net income decrease of 1.2 percent, or $1,300, in 2027. Meanwhile, the top 1 percent will receive a net income increase of nearly $5,000.
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In 2027, the poorest 20 percent of American households will be $160 worse off because of the new policies in the OBBBA and will lose $1,490 in income to tariffs, for a net decrease of $1,650, or 3.4 percent of their income. (see Figure 1) At the same time, the middle 20 percent of American households, who have an average income of $109,000, will see that income decrease by $1,300 after they receive a tax cut (net of spending cuts) of $950; but the Trump administration’s massive tariffs increase their costs by $2,250. In contrast, new provisions in the OBBBA give the top 1 percent a $17,800 benefit, which exceeds their average $12,800 tariffs costs by $5,000.
The real-life impact on the wallets of Americans who aren’t the one percent is going to be brutal.
The Trump administration rejects the findings of the study by claiming that the tariffs and tax cuts for the rich are going unleash a wave of job growth and prosperity, just like in Trump’s first term.
However, Trump’s first round of tax cuts for the rich did not unleash prosperity and growth.
The Center For Budget and Policy Priorities found that Trump’s first round of tax cuts actually decreased business investment and consumption. Overall, economic growth only ticked up due to increased government spending, which was eliminated in the second round of Trump’s tax cuts for the rich.
Rigorous research into some of the law’s key provisions also shows the lack of evidence for the Trump Administration’s claims. For example, despite Republicans’ promises that the special 20 percent deduction for pass-through business income would boost investment and create jobs, researchers have found no evidence that the deduction significantly increased investment, wages for non-owners, or employment.
Similarly, though the Trump Administration promised the corporate rate cut would “very conservatively” lead to a $4,000 boost in household income, a study by economists from the Joint Committee on Taxation and the Federal Reserve Board found that workers in the bottom 90th percentile of their firm’s income scale saw “no change in earnings” from the rate cut. In addition, the authors find that the revenue loss from the decrease in corporate tax revenues far outweighs any boost in output from the tax cut.
When taxes are cut for the wealthy and corporations, the money stays at the top. There is no “trickle-down effect” to everyone else.
Trump’s economic policies are just getting started, and they are about to do some major damage to everyone in the US economy who isn’t already rich.
What do you think about the CAP study? Share your thoughts in the comments below.
