‘Big Beautiful Bill’ will leave most Americans worse off
Polygraph | Newsletter n°308 | 4 Jul 2025
IN THIS NEWSLETTER: The winners and losers of Trump’s megabill.
*Thank you, Ron C. and Marvin B., for supporting Polygraph! Please consider joining Ron, Marvin, the other paid subscribers thanked at the bottom of each newsletter.
The Big Beautiful Bill isn’t a good deal for most people
Donald Trump just signed the sweeping One Big Beautiful Bill Act into law. The House passed Trump’s legislative agenda yesterday after the Senate narrowly approved the bill earlier this week.
It’s impressive, in a perverse sort of way, how the bill manages to be both brutally austere and incredibly expensive at the same time. The Congressional Budget Office (CBO) projects that Trump’s megabill will reduce spending over the next decade by $1.2 trillion. But for every dollar in spending saved, nearly four dollars in revenue are lost through its tax cuts. The Big Beautiful Bill is almost twice the cost of the American Rescue Plan ($3.4 trillion vs. $1.8 trillion) despite the 2025 legislation drastically cutting the very types of social programs the 2021 bill dramatically expanded.
Tax cuts can be really helpful when it comes to working-class well-being. The checks authorized by the American Rescue Plan and other pandemic relief bills in 2020–21 were basically tax cuts — technically credits against income tax liability structured as rebates — and proved highly effective in reducing hardship. That’s not what’s going on here, though. The tax breaks primarily benefit the rich, while the rest of Trump’s megabill frays the social safety net that so many walk a tightrope over.
The Penn Wharton Budget Model projects that workers will work more, earn less, and ultimately won’t be able to make up for the losses caused by atrophied social programs under the new law. The graph below, based on Penn’s data, shows average equivalent variation by income bracket. This means that for people in the bottom income quintile, the effects of the legislation are akin to paying a one-time $24,030 penalty under current (pre–Big Beautiful Bill) policy. For those in the top income quintile, the Big Beautiful Bill helps them as much as receiving a one-time $50,090 check would if it hadn’t become law.
^Alt text for screen readers: Big Beautiful Bill will leave most households worse off. Projected financial gain or loss, by income group. Bottom quintile, –$24K; 2nd quintile, –$10K; 3rd, –$2K; 4th, +$13K; top, +$50K. Figures show average equivalent variation, the amount a household would need to gain or lose under current policy to be as well off as under the new policy. Data: Penn Wharton Budget Model, July 2025.
SPECIAL THANKS TO: Abe B., Alan F., Amin, Andrew R., AT., B. Kelly, BartB., BeepBoop, Ben, Ben C.,* Bill S., Bob N., Brett S., Byron D., Chris, Chris G., Cole H., D. Kepler, Daniel M., Dave, David J., David S.,* David V.,* David M., Elizabeth R., Errol S., Foundart, Francis M., Frank R., Gary W., Gladwyn S., Graham P., Griffin R., Hunter S., Irene B., Isaac, Isaac L., Jacob, James H., James N., Jcowens, Jeff, Jennifer, Jennifer J., Jessica S., Jerry S., Joe R., John, John, John A., John K., John M., Jonathan S., Joseph B., Joshua R., Julia G., Katrina H., Kheng L., Lea S., Leah A., Leila CL., Lenore B., Linda B., Linda H., Lindsay, Lindsay S.,* Lora L., Mapraputa, Marie R., Mark L., Mark G., Marvin B., Mary Z., Marty, Matthew H.,* Megan., Melanie B., Michael S., Mitchell P., Nick B., Noah K., Norbert H., Omar A., Omar D.,* Peter M., Phil, Philip L., Ron C., Rosemary K., Sari G., Scarlet, Scott H., Silversurfer, Soh, Springseep, Stan C., TBE, Teddie G., Theresa A., Themadking, Tim C., Timbuk T., Tony L., Tony T., Tyler M., Victor S., Wayne H., William P.
* = founding member