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By Giulia Carbonaro
Senior Reporter
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The massive tax breaks included in President Donald Trump’s “One Big Beautiful Bill” (OBBB) have backfired against the poorest Americans, resulting in the lowest-income residents of nine states actually paying higher taxes, according to a new study by InvestorsObserver,
Across affected states, the president’s promise of “tax relief for all Americans” has turned into $10,000+ annual savings for the wealthiest, while the poorest families face a higher tax burden, the company found.
“This isn’t tax relief that ordinary families can celebrate. For millions of America’s most vulnerable families, it’s a tax penalty, coming at a time when every dollar counts for groceries, rent, and keeping the lights on,” Sam Bourgi, senior analyst at InvestorsObserver, said in the report.
Read More on Politics
Newsweek contacted the White House for comment by email on Monday morning.
Why It Matters
Trump’s signature spending bill, the “One Big Beautiful Bill,” was passed with no Democratic support after extensive back-and-forth and signed into law by the president on July 4, 2025.
Among other measures, it extended Trump’s 2017 tax cuts, lowering taxes for corporations and for individuals across most income brackets, eliminated federal taxes on overtime and tips and increased the deduction limit for state and local taxes (SALT).
While the president spoke of the bill as offering tax savings to all Americans, experts and critics warned that the richest Americans stood to benefit more from it than the poorest.
According to estimates from the nonpartisan Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT), the bill is expected to cut taxes for the richest 10 percent of Americans by more than $14,700 per year per household and cut taxes for the richest 1 percent of Americans by more than $50,000 per year through 2035.
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What To Know
InvestorsObserves’ report, based on analysis by the Institute on Taxation and Economic Policy, found that the impact of the Trump administration’s OBBB is heavily tilted in favor of those already at the top.
According to the company, the near-wealthy save over 2,000 times more than the poor thanks to the changes introduced under the megabudget bill.
Just how much the richest Americans benefit from Trump’s tax cuts more than the poorest changes wildly from state to state. In Montana, the richest residents receive tax breaks 2,194 times larger than the poorest taxpayers, “enough to cover nearly a year of mortgage payments versus two gallons of milk,” InvestorsObserver wrote.
In high‑cost states like New Jersey, California and New York, the wealthiest households get tax cuts of around $20,000 while low‑income families get at most a few hundred dollars. In West Virginia, the "so-called "middle class" gets 2 months of mortgage covered by the tax breaks, while California’s gets 3 weeks, according to the study.
While in most states the poorest residents are saving money as a result of the bill, according to the study, in nine states they pay higher taxes as a result of the OBBB.
The biggest burden was faced by Florida’s poorest 20 percent, who will pay an extra $150 a year in taxes, according to InvestorsObserver’s estimates. At the same time, the state’s wealthiest households are expected to save $20,160 every year.
In Wyoming, the poorest families face a $90 tax increase. In North Carolina, $70 more. In Oklahoma, $50 more. In South Carolina and Nebraska, $30 more each. In Alabama and Missouri, low‑income families pay $20 more each, and in Kansas, $10 more.
Poorest households received the biggest dollar tax breaks in Minnesota, Washington, New Hampshire, Alaska and New York where low‑income families saved between $160 and $240 a year. according to the study.
What People Are Saying
Sam Bourgi, senior analyst at InvestorsObserver, said in the report: “This is a reversal of the basic promise of tax relief: help those who need it most. The economic implications extend beyond individual bank accounts. When wealthy households receive $20,000 tax breaks, much of that money gets saved or invested, not spent in local economies.
“When working families get $100, or lose $150, they’re forced to cut back on essentials. Less money for groceries means less revenue for local stores. Less mortgage coverage means more families at risk of foreclosure.”
What Happens Next
The OBBB’s tax provisions benefiting larger income earners will cost nearly $2.3 trillion through 2035, making up nearly 70 percent of the legislation’s estimated $3.4 trillion deficit cost, according to the left-leaning Center for American Progress (CAP).
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