{"id":17556,"date":"2025-07-01T06:48:52","date_gmt":"2025-07-01T06:48:52","guid":{"rendered":"https:\/\/finderica.com\/?p=17556"},"modified":"2025-07-01T06:48:52","modified_gmt":"2025-07-01T06:48:52","slug":"the-senate-budget-bill-is-growing-more-regressive","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=17556","title":{"rendered":"The Senate Budget Bill Is Growing More Regressive"},"content":{"rendered":"\n
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WASHINGTON, DC – JUNE 23: Senate Majority Leader John Thune (R-SD) speaks to reporters after leaving … More<\/span> the Senate Chambers. (Photo by Kayla Bartkowski\/Getty Images)<\/span><\/p>\n

<\/fbs-accordion>Getty Images<\/small><\/figcaption><\/figure>\n

The tax provisions of the budget bill being debated on the Senate floor would be even more regressive than the version drafted by the Senate Finance Committee, according to a new Tax Policy Center analysis<\/a>. On average, the Senate measure released on June 28<\/a> would cut 2026 taxes by about $2,900, up about $250 from the Finance Committee\u2019s version.<\/a> But the current Senate version of the One Big Beautiful Bill Act would distribute most of those additional tax cuts to the highest-income households. The main reason: the way it treats the state and local tax deduction.<\/p>\n

Comparing The Plans<\/h2>\n

The Senate bill would cut taxes by an average of $12,500, or 3.4% of after-tax income, for those making $217,000 or more, the highest-income 20% of households. That\u2019s about $1,500, or 0.4% of after-tax income, more than they\u2019d get under the Finance panel\u2019s plan.<\/p>\n

Those making between $460,000 and $1.1 million (the 95th-99th income percentile) would get an average tax cut of $21,000, raising their after-tax incomes by 4.4%. That would be roughly identical to the House version but nearly $3,000, or 0.6% of after-tax income, more generous than the Finance measure.<\/p>\n

Similarly, the bill on the Senate floor would cut taxes by an additional $8,000 on average for those who make $1.1 million or more, the top 1 percent of households\u2014and an extra $40,000 for those who make $5 million or more, the top 0.1%\u2014compared to the Finance bill.<\/p>\n

Even with those added tax cuts, the current Senate bill remains slightly less generous than the House measure for the highest-income households.<\/p>\n

While those high-earners get much more than in the Finance panel\u2019s measure, the same can\u2019t be said for low- and middle-income households.<\/p>\n

For example, the lowest-income households, those making about $35,000 or less, would get an average tax cut of $150 under either the Finance Committee\u2019s or the Senate\u2019s bill and $160 under the House bill, less than 1 percent of their after-tax income. Middle-income households would get an average tax cut of roughly $1,800 under all three measures: a bit more in the House bill and slightly less in the two Senate versions.<\/p>\n

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Comparing three versions of the big budget bill <\/p>\n

<\/fbs-accordion>Tax Policy Center<\/small><\/figcaption><\/figure>\n

Differing Details<\/h2>\n

The House and Senate bills are broadly similar. Both would extend the individual provisions of the 2017 Tax Cut and Jobs Act; continue and enhance some corporate tax provisions; and adopt scaled-back versions of President Donald Trump\u2019s tax-related campaign promises, such as tax-free tips<\/u><\/a> and overtime.<\/p>\n

But they differ in scores of details, some minor and some significant. And the tax cuts in the Senate bill are substantially more expensive. The congressional Joint Committee on Taxation estimates the pending Senate bill <\/u><\/a>would slash federal revenues by more than $4.4 trillion over the next decade. The House-passed OBBBA would reduce federal revenue by $3.9 trillion, according to JCT.<\/u><\/a><\/p>\n

Both bills would allow costly provisions to expire on paper within the 10-year budget window. But because future Congresses are likely to extend those provisions once again, the true cost is likely to be substantially more.<\/p>\n

To satisfy many factions of Republicans, Senate GOP leaders made several revisions to the Finance draft. They made even deeper cuts to Medicaid and the Affordable Care Act and, at the same time, proposed even more generous tax cuts for high-income households.<\/p>\n

Including spending reductions and other offsets, the Senate bill would increase the federal debt by $3.3 trillion over the next decade, according to CBO<\/u><\/a>. Additional interest would boost the debt by an additional $700 billion, according to the Committee for a Responsible Federal Budget.<\/u><\/a><\/p>\n

All About SALT<\/h2>\n

Why are the tax cuts in the latest Senate bill so much more generous than the Finance panel\u2019s plan? The primary reason is the state and local tax deduction, including the way it treats owners of pass-through businesses such as partnerships and sole proprietorships.<\/p>\n

The Finance panel did not address the controversial SALT issue. The Senate bill adopts the House plan to boost the maximum SALT deduction from $10,000 to $40,000, though only through 2029.<\/p>\n

Crucially, it also allows owners of pass-through businesses to avoid the SALT deduction cap entirely by continuing to take advantage of state-enacted loopholes<\/u><\/a>.<\/p>\n

That workaround allows these business owners to fully deduct their state and local taxes by paying the levies through their firms. About 36 states allow this.<\/p>\n

The House and Finance panel bills would have somewhat limited that exemption<\/u><\/a>. But the pending Senate bill keeps the door wide open, effectively freeing very wealthy business owners from any cap on their SALT deductions.<\/p>\n

Both the House and Senate bills would phase out the more generous deduction for many households starting at $500,000. But since wealthy business owners could continue to fully deduct their state and local taxes if the state workarounds are allowed, the income limit on the cap is meaningless to them.<\/p>\n

The Finance panel plan faced substantial criticism for its regressivity and cost. But GOP leaders have nonetheless doubled down and written a Senate bill that benefits top earners even more.<\/p>\n<\/div>\n

Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

WASHINGTON, DC – JUNE 23: Senate Majority Leader John Thune (R-SD) speaks to reporters after leaving … More the Senate Chambers. (Photo by Kayla Bartkowski\/Getty Images) Getty Images The tax provisions of the budget bill being debated on the Senate floor would be even more regressive than the version drafted by the Senate Finance Committee,<\/p>\n","protected":false},"author":1,"featured_media":17277,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[196],"tags":[856,459,2720,6076,2421],"class_list":{"0":"post-17556","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-news","8":"tag-bill","9":"tag-budget","10":"tag-growing","11":"tag-regressive","12":"tag-senate"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/17556","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17556"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/17556\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/17277"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17556"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17556"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17556"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}