Trump ‘big beautiful’ bill gives top 1% biggest tax cuts in these states
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The highest earners in Wyoming, South Dakota and Texas stand to get a tax cut of more than $100,000, according to the Institute on Taxation and Economic Policy.
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personal finance
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July 3, 2025
06:50 PM
CNBC
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Legislation championed by President Donald Trump would give the top 1% of U
Households an average tax cut of $66,000, according to the Institute on Taxation and Economic Policy
The highest earners in Wyoming, South Dakota and Texas stand to get a tax cut of more than $100,000 from the bill, formerly called the One Big Beautiful Bill Act
Overall, lower earners would lose money due to a smaller tax cut and changes to Medicaid and SNAP, analyses have found
Speaker of the House Mike Johnson, R-La. , speaks to reporters as he walks back to his office as the House of Representatives waits to vote on President Trump's "big beautiful bill" reconciliation package on July 3, 2025
Bill Clark | CQ-Roll Call, Inc. | Getty ImagesA massive package of tax cuts championed by President Trump that Congress passed on Thursday would be a windfall for the wealthiest U
But the size of that financial benefit depends largely on where high-income taxpayers, according to a new analysis by the Institute on Taxation and Economic Policy
The legislation would give the top 1% of U
Households an average tax cut of $66,000, or 2. 4% of their income, in 2026, according to ITEP, a left-leaning think tank. (These households have incomes of $917,000 or more per year, averaging $2. 7 million, it said. )Some households stand to get a much bigger tax benefit
The wealthiest households in three states — Wyoming, South Dakota and Texas — would see their annual tax bills fall by more than $100,000, ITEP found
In Wyoming, the top 1% would see their taxes fall most: by an average of $133,000 (or 3% of income) in 2026, it said
The average income of the top 1% in the state is $4
Watch now6:0206:02Trump’s megabill heads to final vote after Republican divisions nearly derail itSquawk Box"The bill is most advantageous to conservative-leaning states that have a lot of very wealthy people living within their borders," said Carl Davis, ITEP's re director
These states also don't levy personal income taxes, he said
Wyoming and Texas "are classic examples of states with a lot of wealthy people and which tax those wealthy people incredibly lightly," Davis said
Why the wealthy get a large tax cutSenate Republicans passed the legislation, originally called the One Big Beautiful Bill Act, on Tuesday with the slimmest of margins
House Republicans passed the bill on Thursday, and sent it to the president for his signature
The legislation offers more than $4 trillion of net tax cuts over a decade, with most benefits accruing to higher-income households, analyses have found
It also slashes the social safety net, cutting billions of dollars from grams Medicaid and food stamps meant to help lower earners
More from Personal Finance:Top five tax changes for the wealthy in Trump megabillTrump tax deductions may not carry large benefits for low earnersTrump megabill axes $7,500 EV tax credit after SeptemberThe centerpiece of the bill is an extension of 2017 tax cuts enacted during President Trump's first term in office
Overall, the legislation lowers income tax rates, exempts a larger of wealthy estates from taxation and offers tax breaks to owners
These are among the core ways the GOP bill benefits high-income households, Davis said
It also caps the amount of state and local income taxes and perty taxes that households can deduct from their taxable income each year, at $40,000
Watch now5:2705:27Republican don't want to face wrath of President Trump, will vote for bill, says Stifel's GardnerClosing Bell: OvertimeThat "SALT" policy doesn't negatively impact wealthy residents in states Wyoming, South Dakota and Texas, where residents don't owe state income tax, Davis said
But it has a large impact on states with high state and local income taxes and perty taxes
In other words, high-income residents of Wyoming, South Dakota and Texas generally get most of the tax upside and not much downside, he said
Conversely, the highest earners in California and New Jersey would see a smaller tax cut in 2026, averaging $34,000 and $21,000, respectively, ITEP found
That represents 1% of their income in each state
Separate analyses have found that the wealthiest households will reap the largest financial benefits from the GOP bill
Households (earning more than $217,000 a year) would get a tax cut equivalent to 3. 4% of their after-tax income in 2026, according to the Tax Policy Center
Meanwhile, the bottom 20% would get a 0. 8% tax cut
Its analysis only examined the tax portions of the legislation
Overall, more comprehensive analyses that also account for cuts to grams Medicaid and the Supplemental Nutrition Assistance gram, the lowest earners would be worse off, according to analyses by the Budget Lab at Yale University and the Congressional Budget Office, which modeled similar legislation passed by the House last month.
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