Analysis shows the richest 1% would receive $121 billion in tax cuts while the poorest fifth see only 1% of the benefit.
Republicans in the US House of Representatives spent the week before Memorial Day pushing through a sweeping tax and spending package. It’s a major victory for President Donald Trump, containing a slew of tax cuts, a larger State and Local Tax (SALT) tax deduction, serious cuts to Medicaid and SNAP, and new spending for immigration.
As it heads to the US Senate, the bill is already raising the alarm among both parties. Politico reported Republican Senator Ron Johnson of Wisconsin said Trump’s bill can’t pass without major changes.
“I’m hoping now we’ll actually start looking at reality,” Johnson said after the bill passed the House early Thursday morning.
A new report from the Institute on Taxation and Economic Policy offers a grim picture of what America would look like under Trump’s “Big Beautiful Bill” and how it would affect Iowans.
The report found that the bill benefits America’s wealthiest taxpayers, providing minimal relief to working-class families. This further backs up a Congressional Budget Office analysis that found a similar result.
The rich > the rest
Nationally, the tax provisions heavily skew toward high earners, with the richest 1% of Americans receiving $121 billion in net tax cuts in 2026 alone. By comparison, the middle 20% of taxpayers—a group that’s 20 times larger—would receive only half that amount.
The analysis shows dramatic inequality in how the tax cuts would be distributed across income levels. The wealthiest 5% of Americans would capture 43% of all net tax cuts, while the poorest fifth of the population would receive just 1% of the benefits.
Individual taxpayers in the top 1% would see an average tax cut of nearly $69,000. That vastly exceeds the modest reductions received by other income groups. Meanwhile, the bottom 60% of all taxpayers combined would receive less in total tax cuts than the top 1% alone.
In Iowa, the average residents income is $73,147, according to the US Census. For that middle 20% of Iowa, they can expect an average tax cut of $1,620. Meanwhile, the richest 1%—people making more than $677,600—would get an average tax cut of 78,530. That’s a whopping 4748% difference.
The picture becomes even more grim for working-class families when accounting for President Trump’s tariff policies. The analysis found that higher import taxes would effectively cancel out most tax benefits for the bottom 80% of Americans.
For the poorest 40% of Americans, the cost of tariffs would actually exceed the value of their tax cuts, leaving them worse off overall despite the legislation’s tax reduction provisions.
The ITEP report focused on tax provisions and did not account for proposed cuts to social programs like Medicaid and food assistance that are also included in the legislation. Since these programs primarily serve low-income families, including them would likely show an even more unfavorable impact on working-class Americans.
The legislation also includes provisions benefiting foreign investors who own shares in U.S. companies, who would receive $23 billion in tax cuts — nearly six times more than the $4 billion going to the bottom 20% of American taxpayers.
