Source: July 5, 2025 – by Heather Cox Richardson
The measure makes the 2017 Trump tax cuts for the wealthy and corporations, which were due to expire at the end of this year, permanent. At the bill’s signing, Trump harked back to the idea Republicans have embraced since 1980, claiming that tax cuts spark economic growth. He said: “After this kicks in, our country is going to be a rocket ship economically.”
In fact, tax cuts since 1981 have not driven growth, and a study by the nonpartisan Penn Wharton Budget Model of the University of Pennsylvania projects that the measure will decrease national productivity, known as gross domestic product (GDP), by 0.3% in ten years and drop the average wage by 0.4% in the same time frame.
From 1981 to 2021, tax cuts moved more than $50 trillion from the bottom 90% to the top 1%, and Penn Wharton projects the top 10% of households will receive about 80% of the total value of this law, too. Those in the top 20% of earners can expect to see nearly $13,000 a year from the bill, while those in the bottom 20% of households will lose about $885 in 2030 as the pieces of the law take effect.
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