The Impact of Trump’s Big, Beautiful Bill on the Middle vs Upper Class
- - The Impact of Trump’s Big, Beautiful Bill on the Middle vs Upper Class
T. WoodsJuly 28, 2025 at 11:46 PM
Daniel Torok / White House / ZUMA / Shutterstock.com
While there are still more than three years to go, one of the most consequential acts of President Donald Trump’s second administration will likely be his signing of the One Big Beautiful Bill (OBBB) Act into law.
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The OBBB was quite controversial — even among Trump’s fellow Republicans — due primarily to its projected cuts to Medicaid, as well as its addition of trillions of dollars to America’s national debt. Due to those controversial elements (among many others), the budget reconciliation law is expected by its supporters and opponents both to reshape America’s economic landscape for years, if not decades, according to Newsweek.
Critics of the OBBB, per The Guardian, have argued that it will ultimately only benefit America’s wealthiest citizens while also cutting the benefits from the struggling and shrinking middle class. Meanwhile, Republicans have defended the law as one that will slash and burn excess taxation.
So, which is true? Who does the OBBB benefit, if anyone? Who does it harm, if anyone?
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The Middle Class
While the OBBB’s detractors will argue that the law will do nothing but harm to the American middle class, there are benefits. For instance, the Child Tax Credit was increased to $2,000 per child per family (up from $1,000 previously). There were also changes made to the nature of tax withholdings, which allows workers to slightly increase their take-home pay; further, members of the middle class were able to increase their standard tax deductions and reduce their income tax rates.
While these are concrete changes they do remain relatively minimal by comparison to the benefits bestowed upon the upper class.
These middle class tax cuts of the OBBB are all set to expire at the end of 2025.
On the opposite end of the spectrum, there are potential negatives for the middle class with regards to the OBBB.
Perhaps most palpable will be the cost of an additional $3-6 trillion to the federal deficit — the cost of the OBBB will almost surely lead to much higher interest rates. Higher interest rates mean higher prices for nearly everything — financing a new car or home, stopping at the gas pump, and especially shopping at the grocery store.
The inflation rate hangover of the COVID-19 era was a major factor in the American middle class in the 2024 election; the cost of the OBBB will certainly be felt by sensitive middle class shoppers in the years to come.
The Upper Class
In contrast to the middle class, the wealthy stand to gain a great deal from the OBBB. Specifically, the richest 20% of America will see its net income increased by approximately $13,000 per year thanks to various OBBB tax breaks.
Speaking of tax cuts, the corporate tax rate was slashed from 35% to 21%, a massive break for the extremely wealthy who either own businesses or rather sizeable stock options.
In addition, the Estate Tax exemption nearly doubled, allowing wealthy families the ability to pass on various familial assets valued up to $11 million without any tax penalties.
Of note, these upper class tax cuts of the OBBB are permanent, unlike those for the middle class.
Bottom Line
While there are some benefits to the middle class in the OBBB, it’s worth noting that most if not all of them are not only temporary but are rather minor when compared to the massive benefits bequeathed to the American upper class. Additionally, what benefits the middle class does receive are temporary, while those awarded to the upper class are permanent. Overall, the wealthy stand to gain far more than the middle class when it comes to the OBBB.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: The Impact of Trump’s Big, Beautiful Bill on the Middle vs Upper Class
Source: “AOL Money”
