An analysis by Yale University has found that a budget plan being considered by Republican lawmakers would ultimately transfer wealth from the poorest 40 percent of Americans to the richest 1 percent.
Researchers Harris Eppsteiner and John Ricco of Yale’s Budget Lab found that the proposed GOP budget whose framework was supported last month in a vote by the House would include $4.5 trillion in tax cuts that would largely benefit the wealthy, along with $1.5 trillion in spending cuts, including to benefits for the public, including the poorest.
Approximately $230 billion of those cuts would come from the Supplemental Nutrition Assistance Program — often shorted to SNAP — which helps poor families afford food.
Another $880 billion would come from cuts to Medicaid, which provides assistance for individuals with limited resources to pay for healthcare. It’s also the program that covers most costs for 60 percent of elderly Americans in nursing homes.
Both cuts would occur over a 10-year period.
“The overall effect of these policy changes would be regressive, shifting after-tax-and-transfer resources away” from households at the “bottom of the distribution towards those at the top,” Eppsteiner and Ricco wrote in their analysis.
After-tax-and-transfer income refers to the income remaining after deducting all taxes and adding back government “transfers,” such as Social Security, Medicare, unemployment benefits, and so on.
Taxed households at the “bottom of the income distribution would see a reduction in after-tax-and-transfer income of 5 percent, those in the middle of the distribution would see a modest increase of 0.6 percent, and those in the top 5 percent of tax units [household] would see an increase of 3%,” wrote Eppsteiner and Ricco.
“More than 100 percent of the net fiscal benefit would accrue to the top quintile,” the analysis added.
Donald Trump has repeatedly insisted that he will not cut Medicaid, but independent analysts have reported that the Republicans cannot achieve their budget without making severe cuts to the program.
Proposed Republican changes to Medicaid have already caused protests in several parts of the nation.
In addition to the cuts, the proposed Republican budget would also renew expiring provisions of Trump’s Tax Cuts and Jobs Act of 2017, which itself was the largest transfer of wealth from the poor to the ultra-rich in U.S. history.
The report notes that the proposed plan it analyzed may change between now and whenever it may be passed in the future.
“As noted above, the Resolution passed by the House on February 25 does not specify how each committee is to meet its specified target. As such, the committees may ultimately endorse policy changes that substantially differ from those analyzed in this blog post,” the authors wrote.
