Who Actually Gets a Tax Cut? Breaking Down the ‘One Big Beautiful Bill’

The current bill lacks in new benefits for Americans earning more than $36,000 a year (or $3,000 a month). And for Americans who live in High-Cost-Of-Living (HCOL) cities and locations, they on average experience 20% less relief from the bill.

Who Gets a Tax Break (And Who Doesn’t)

For the lowest-income Americans (e.g., those earning under $20,000/year), OBBB is expected to provide less than 3% annual financial relief. In contrast, long-standing federal programs deliver significantly more:

• Earned Income Tax Credit (EITC): Up to $7,430 in relief per household
• SNAP (food assistance): ~$3,000 in average household value with high local economic impact
• Medicaid Expansion: Provides thousands in health care coverage per enrollee

These programs reach millions more Americans and deliver 5x to 20x greater economic value per person compared to OBBB’s individual benefits.

While the One Big Beautiful Bill offers a mere 3% relief to low-income earners — primarily via untaxed tips — programs like the EITC, SNAP, and Medicaid offer 5x to 20x the economic value per person, with broader reach and documented poverty-reducing effects.

What the Bill Quietly Takes Away

To offset costs, the bill phases out or eliminates a range of federal programs. These include:

• Environmental Justice Block Grants:
  $3B eliminated. Previously funded local green infrastructure and jobs in underserved communities.
• EV & Clean Energy Tax Credits:
  $2.4B/year repealed. Affected incentives for electric vehicles and home energy upgrades.
• IRS Direct File Pilot:
  $30M cut. This public option for free tax filing primarily served low-income taxpayers; its removal may increase reliance on paid tax services.
• School and Port Pollution Grants:
  $1.5B/year repealed. Affects infrastructure and emissions modernization.
• SNAP Administrative Cost-Shift:
  $5–7B shifted to states. May reduce efficiency and consistency of benefits across states.
• Sunsetting Medicaid Expansion Incentives:
  $6B/year reduced. Could lead to lower health coverage in states yet to expand.
• Immigration Fees Introduced:
  $1.5B/year in new costs. May reduce access to asylum and visa services.
• Coal and Offshore Oil Leasing Restored:
  $12–15B in new federal revenue projected. Adds short-term GDP growth from extractive industries, but raises long-term environmental and economic risk.
• 250th Anniversary Celebration Funding:
  $250M in one-time costs. Primarily symbolic, with limited fiscal impact.
• Ban on Medicaid Gender Transition Coverage:
  ~$10–20M in cuts. Narrow impact, though symbolically significant for healthcare access.

When modeled across sectors, the bill appears to reallocate GDP contribution:

• Sectors like clean energy, healthcare, and food assistance see reductions in economic activity.
• Gains are concentrated in fossil fuel leasing and immigration fee collection, with less direct benefit to household-level economic security.

In total, the bill may shift $30–40 billion annually in GDP impact, with a net neutral to negative effect depending on industry response and consumer behavior.

Economic Impact – By the Numbers

The Narrative vs. The Numbers

While some provisions of the “One Big Beautiful Bill” may benefit certain workers and industries, especially in low-cost regions and extractive sectors, the overall economic impact for most Americans is limited. Compared to programs like EITC, SNAP, and Medicaid — which have decades of data supporting their effectiveness — OBBB offers smaller benefits to fewer people while reducing investment in programs that drive long-term, inclusive growth.

Conclusion: A Tipping Point for Tax Policy

As debate around the “One Big Beautiful Bill” continues, a clearer picture emerges: despite its headline appeal, the bill delivers limited direct tax relief to most Americans, especially those earning above $36,000 per year. While tipped workers and low-income households may see marginal gains — particularly in low-cost regions — the broader benefits are far more constrained than public framing might suggest.

At the same time, the legislation quietly reduces or eliminates programs that have historically supported economic mobility, environmental modernization, and public health — all while expanding revenue from fossil fuel extraction and new immigration-related fees. These tradeoffs signal a shift in federal spending priorities, favoring short-term revenue gains and targeted tax cuts over investments with proven long-term multipliers.

Looking ahead, this bill may set the stage for deeper fiscal realignment. Many provisions from the 2017 Tax Cuts and Jobs Act are set to expire in 2025, and with a presidential election on the horizon, tax policy will likely take center stage once again. The choices made today — about who benefits, what gets cut, and how we define economic value — will shape the next wave of proposals and the broader economic outlook for years to come.

For policy analysts, journalists, and watchdog organizations, now is a critical moment to look beyond the headlines. Understanding how these bills translate into real-world effects — on households, local economies, and the federal budget — is essential to holding the process accountable and ensuring that future reforms align with both fiscal responsibility and economic equity.

Sources:
https://www.congress.gov/bill/119th-congress/house-bill/1/text

https://www.whitehouse.gov/obbb