Who REALLY Pays for Trump’s Tax Cuts?

U.S. President Donald Trump’s sweeping tax-cut legislation, currently under Senate consideration, is facing criticism from nonpartisan analysts for disproportionately benefiting older Americans at the expense of younger generations, risking higher future taxes and mortgage costs.

At a Glance

• The “One Big Beautiful Bill Act” is projected to add $3 trillion to the national debt.
• A 40-year-old median earner could lose $7,500 over their lifetime under the bill.
• A 70-year-old with the same income could gain $17,500.
• The bill protects Medicare and Social Security but cuts Medicaid and other support programs.
• The Congressional Budget Office estimates the bill would add $2.8 trillion to the deficit over a decade.

Generational Divide in Tax Benefits

The proposed legislation includes tax breaks for parents, newborns, private-school students, and younger workers. However, analysts argue these benefits are outweighed by the bill’s contribution to the national debt, which the Penn Wharton Budget Model projects will add roughly $3 trillion, depressing economic growth. This debt increase will likely lead to higher interest rates and mortgage costs, burdening younger Americans. For example, a 40-year-old median earner stands to lose about $7,500 over their lifetime, while a 70-year-old with the same income could gain $17,500.

Watch a report: Trump’s Budget Plan Shifts Wealth from Young to Old.

Impact on Social Programs

While the bill protects Medicare and Social Security from cuts, it imposes reductions on Medicaid and other social support programs, which could increase healthcare costs and reduce access to services for younger and lower-income Americans. The Congressional Budget Office estimates the legislation would increase the number of uninsured Americans by 10.9 million over the next decade while adding approximately $2.8 trillion to the federal deficit.

Political and Economic Implications

Republican lawmakers argue the bill promotes long-term economic growth and fiscal sustainability. However, independent analyses warn that the plan shifts a significant share of the fiscal burden onto younger generations, potentially reducing economic opportunity. The generational wealth transfer embedded in the legislation raises concerns about fairness and the sustainability of public finances as younger Americans face higher taxes and costs over time.

This budget debate highlights the challenges in balancing immediate tax relief with the long-term fiscal health of the nation, especially regarding intergenerational equity.