Musk Vigorously Opposes “Sweetheart” Bill: Yale Claims It Will Make Poor Poorer and Rich Richer

In a significant legislative push, the U.S. Senate convened for a day of voting on amendments to the “Big and Beautiful” bill on June 30th. This pivotal session is expected to pave the way for a final vote on President Trump’s signature tax and spending package, with proceedings anticipated to extend late into the night.

An analysis conducted by Yale University suggests the “Big and Beautiful” bill could lead to a 2.9% reduction, or approximately $700 annually, in income for the bottom 20% of households. These households typically earn less than $13,350 per year.

In stark contrast, the top 20% of earners, those making over $120,000, are projected to see their annual incomes increase by 2.2%, equating to roughly $5,700. This disparity highlights a significant redistribution of wealth.

According to the Yale analysis, these financial impacts are slated to affect ordinary families year after year from 2026 through 2034. Harris Eppsteiner, Associate Director of Economic Analysis at the Yale University Budget Lab, commented that the bill appears designed to “shift resources from the lower end of the distribution to the top.”

Eppsteiner clarified that while the Yale study incorporates key provisions of the bill, it does not model the entirety of the Senate’s legislative text. For instance, the analysis does not account for potential modifications to the Affordable Care Act or federal student loans, which could increase costs for borrowers.

The “Big and Beautiful” bill narrowly passed the House of Representatives by a single vote in May and cleared a procedural hurdle in the Senate on June 28th with a slim margin.

Broadly encompassing much of President Trump’s economic agenda, the bill proposes not only extending the 2017 tax cuts but also implementing significant spending reductions on social safety net programs, including Medicaid and the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps.

The latest findings from Yale align with perspectives from other institutions. The non-partisan Congressional Budget Office (CBO) previously analyzed an earlier version of the bill passed by the House, concluding that households in the bottom 10% could collectively lose an average of $1,600 annually between 2026 and 2034—approximately 3.9% of their income. Conversely, the highest-earning 10% could see an average gain of $12,000, representing a 2.3% increase in their income.

Further analysis from the Tax Foundation on Tuesday indicated that approximately 62% of households would benefit from tax relief measures within the Senate bill. However, the survey reinforced that the wealthiest 20% of households are poised to receive the most substantial economic advantages, measured as a percentage of their income.

The legislation is expected to generate billions in savings by cutting funding for Medicaid and SNAP, ostensibly to offset the trillions in tax cuts included in the bill.

Eppsteiner pointed out that both SNAP and Medicaid are crucial programs designed to support individuals at the lower end of the income spectrum. He suggested that any purported economic benefits from tax cuts for these families could be entirely nullified by the reductions in these vital safety net programs.