The Hidden Costs of the Big, Beautiful Bill
The Promise and the Reality
The "big, beautiful bill" signed into law on July 4, 2025, is touted to boost the economy and improve financial stability. However, a closer examination reveals it may widen the wealth gap, particularly for low-income and minority communities.
The Racial Wealth Gap
The racial wealth gap in the U.S. is already staggering. Between 2019 and 2022, the median wealth of white families was over $250,000 more than that of Black families. This disparity stems from decades of unfair policies in housing, banking, healthcare, taxes, education, and employment.
The new law exacerbates this gap by extending tax cuts that primarily benefit wealthy families.
Tax Cuts: A Familiar Story
The law's tax cuts mirror those of the 2017 tax reform. Back then:
- Low-income families gained only $70 a year.
- They lost over $4,000 in healthcare subsidies due to the elimination of the individual mandate.
The new law also cuts programs like Medicaid and food assistance, making it harder for poor families to afford food and healthcare.
Trump Accounts: A "Baby Bonus" for the Wealthy
One provision, the "Trump Accounts", offers a $1,000 government contribution to investment accounts for children born between 2025 and 2028. Dubbed a "baby bonus", it mostly benefits wealthy families:
- They can contribute up to $5,000 a year to these accounts tax-free.
- Low-income families, struggling with daily expenses, cannot take advantage of this.
New Markets Tax Credit: Gentrification in Disguise
The bill renews and enhances the New Markets Tax Credit program, intended to drive investment into low-income communities. However, it mostly subsidizes luxury real estate projects that displace existing residents and fuel gentrification.
Child Tax Credit: A Missed Opportunity
The child tax credit is another misguided provision:
- Families earning up to $400,000 can claim the full $2,200 tax credit per child.
- Families earning $31,500 or less can only claim up to $1,750 per child.
- 17 million children, mostly Black and Latino, receive nothing.
- The law requires both the child and the taxpayer to have a Social Security number, excluding 4.5 million U.S. citizen children in mixed-status families.
Medicaid and SNAP: Harsher Requirements
The law imposes new work requirements for able-bodied adults to maintain Medicaid coverage. Many of these adults already work, care for young children, or are too disabled to work. Additionally, the law requires states to conduct eligibility redeterminations twice a year, often leading to eligible people losing coverage.
For SNAP (Supplemental Nutrition Assistance Program), the bill expands work requirements and revises benefit calculations, reducing benefits for those in need.
The Bottom Line
In summary, the "big, beautiful bill" funds tax cuts for the wealthy while cutting essential services for the poor. This transfers resources up the economic ladder and deepens existing inequalities.