By Jessica I. Marschall, CPA, ISA AM
June 17, 2025
Senate Republicans have introduced their version of the 2025 tax legislation, dubbed the “One Big Beautiful Bill,” which mirrors the House’s intent to make the 2017 Trump tax cuts permanent—but with deeper cuts to Medicaid, reduced support for renewable energy, and a more austere approach to public assistance. The bill, released by the Senate Finance Committee, extends generous tax breaks while shifting the financial burden onto low-income Americans, working families, and environmentally sustainable industries.
Tax Cuts Favor the Wealthy
At its core, the Senate’s proposal deepens an already concerning fiscal path. The bill would raise the federal debt ceiling by $5 trillion and add an estimated $2.4 trillion to the deficit over the next decade. Yet the primary beneficiaries of this mounting debt are not working-class families or small businesses, but high-income earners and large corporations.
According to nonpartisan analysis from the Congressional Budget Office and the Joint Committee on Taxation, the top 1 percent of earners (those making over $700,000 annually) would receive nearly 30 percent of the bill’s tax benefits. The top 20 percent of households would capture over 60 percent of the gains. Meanwhile, low- and middle-income households would receive little to no net benefit—many even facing indirect losses from the rollback of public services and safety net programs.
A detailed analysis published by The New York Times underscores the bill’s regressiveness, identifying it as more skewed in favor of the wealthy than any major tax legislation passed in decades. In fact, the poorest 40 percent of Americans are projected to receive just 1 percent of the total tax cuts, while losing access to critical programs such as Medicaid and food assistance.
In short, the bill digs a deeper fiscal hole to finance permanent tax relief for those who need it least—on the backs of environmental protections, healthcare for low-income families, and the nation’s most vulnerable.
Minimal Relief for Working Families
The Senate proposal maintains the SALT (State and Local Tax) deduction cap at $10,000—far lower than the $40,000 proposed by the House—undercutting potential tax relief for middle-class homeowners in high-tax states. It also offers a trimmed Child Tax Credit of $2,200 per child (compared to $2,500 in the House version), and a deduction of up to $25,000 for tipped and overtime income—far short of the House’s proposal, which allowed up to $160,000. The standard deduction for seniors is increased to $6,000.
These measures, while framed as middle-class relief, are modest in scope and dwarfed by the scale of cuts targeting social safety net programs.
Corporate and Institutional Benefits
The Senate version extends full expensing for business investments and reduces the excise tax on large university endowments to a mere 8 percent, far lower than the House’s 21 percent rate. These provisions primarily benefit elite institutions and large corporations, prompting criticism that the legislation tilts too heavily toward already well-capitalized entities.
Green Energy Rolled Back to Pay for Tax Relief
The bill eliminates federal tax credits for solar and wind energy projects by 2028, beginning with a 60 percent reduction in 2026. This policy change would devastate momentum in the clean energy sector, especially for small-scale and community-based projects. Meanwhile, tax incentives for hydropower, nuclear, and geothermal energy are preserved through 2036—offering selective support to technologies aligned with traditional infrastructure investments.
This retreat from solar and wind incentives does not exist in a vacuum. It is a calculated tradeoff, made to fund tax cuts for the wealthiest Americans. We are cannibalizing long-term environmental health and the fight against climate change in favor of near-term gains for political donors and well-lobbied interests.
Medicaid Cuts: A Target on the Most Vulnerable
Nowhere is the moral cost of this legislation more apparent than in its Medicaid provisions. The Senate bill not only mirrors but expands on the House’s controversial work requirement provisions, now applying them to parents of children aged 15 and older. These individuals must complete 80 hours per month of employment, training, or community service to retain their coverage.
The bill also mandates more frequent eligibility verification and administrative hurdles, which disproportionately impact those with unstable employment, housing, or childcare. As if that were not enough, it reduces the federal cap on provider taxes from 6 percent to 3.5 percent by 2031—choking off a key funding stream for state Medicaid programs and threatening the financial stability of rural hospitals and safety-net providers.
Copays will be required and medical facilities can deny services if copays cannot be paid.
Hospitals in many rural communities are expected to lose upwards of $1 million per year in reimbursements, risking closures and service cutbacks. Combined, these provisions could lead to over 11 million additional uninsured Americans and thousands of preventable deaths annually, according to estimates from the Congressional Budget Office and public health researchers.
According to the Kaiser Family Foundation, Medicaid serves as the nation’s primary public health insurance program for low-income individuals, covering more than 1 in 5 Americans, including a majority of low-income children, nearly half of all births, and a substantial share of people with disabilities and long-term care needs. The program is jointly funded by federal and state governments and plays a critical role in supporting rural hospitals, nursing homes, and community-based care providers. Cuts to Medicaid—such as those proposed in the Senate tax bill—threaten not only individual coverage but also the financial stability of entire healthcare systems, especially in underserved regions. (Source: KFF, “10 Things to Know About Medicaid,” June 2023)
Again, from the Kaiser Family Foundation, Medicaid is far from a strictly liberal-leaning program—enrollment spans the political spectrum. Roughly 25% of Medicaid enrollees identify as Republican, with a similar share living in red-majority congressional districts.[1] In half of all Republican districts, at least 21% of residents rely on Medicaid coverage.[2] Additionally, among the roughly 21 million adults who gained coverage under the Affordable Care Act’s Medicaid expansion, about 4.3 million reside in Trump-voting states.[3] These data make clear that Medicaid cuts would directly impact a significant portion of Republican constituencies and communities across red states—undermining the claim that these measures target only Democratic strongholds.
Studies have consistently found that mortality rates and life expectancy outcomes vary significantly by political alignment. In 2016, states with Republican “trifectas” (control of governor and both legislative chambers) exhibited 55 more premature deaths per 100,000 people than Democratic-controlled states—and between 2016 and 2021, that gap widened by an additional 27 deaths per 100,000.[4] Another analysis shows that counties voting Republican have seen a 15% higher excess death rate during the COVID‑19 pandemic compared to those voting Democratic.[5] Moreover, infant and post‑neonatal mortality rates are substantively higher in Republican-controlled states.[6]
These findings underscore tangible health consequences linked to policy differences—factors that may be exacerbated by proposed Medicaid cuts targeting red states and Republican constituencies.
We are quite literally balancing the cost of high-income tax relief on the health and lives of low-income Americans, seniors, and children.
A Deficit-Funded Wealth Transfer
The Senate’s “One Big Beautiful Bill” is, in effect, a sweeping redistribution of federal resources—upward. It permanently extends tax relief to the wealthiest households and corporations, reduces environmental and health protections, and creates new burdens for the poor, the sick, and the elderly. At the same time, it dramatically increases the national deficit.
This is not a growth strategy. It is a political statement about priorities: tax permanence for the rich, austerity for the rest. As both chambers negotiate the final form of this legislation, lawmakers will need to reckon with the tradeoffs they are making—and who will bear the consequences.
Sources:
Reuters, Politico, ABC News, The Hill, AP News, KFF Health News, Congressional Budget Office, The New York Times(June 17, 2025)
[1] https://abcnews.go.com/Health/gop-cut-medicaid-harder-2017/
[2] https://www.kff.org/medicaid/issue-brief/congressional-district-interactive-map-medicaid-enrollment-by-eligibility-group
[3] https://www.kff.org/medicaid/issue-brief/medicaid-expansion-is-a-red-and-blue-state-issue
[4] https://pmc.ncbi.nlm.nih.gov/articles/PMC11631342
[5] https://www.cidrap.umn.edu/covid-19/political-party-affiliation-linked-excess-covid-deaths
[6] https://pmc.ncbi.nlm.nih.gov/articles/PMC10929005
