Trump ‘big beautiful’ bill gives top 1% biggest tax cuts in these states

The recently passed tax cut package championed by President Trump has sparked controversy over its impact on different income brackets in the United States. According to a new analysis by the Institute on Taxation and Economic Policy (ITEP), the wealthiest 1% of households in the U.S. are set to receive an average tax cut of $66,000 in 2026, representing 2.4% of their income. However, the extent of this benefit varies greatly depending on the state in which high-income taxpayers reside.

ITEP’s analysis reveals that the top 1% of households in Wyoming, South Dakota, and Texas would see their annual tax bills decrease by over $100,000. In Wyoming, for example, the average tax cut for the top 1% would be around $133,000, equivalent to 3% of their income. This disparity in tax benefits is attributed to the fact that conservative-leaning states with high concentrations of wealthy individuals, particularly those without state income taxes like Wyoming and Texas, stand to gain the most from the tax cuts.

The tax legislation, known as the One Big Beautiful Bill Act, was passed by Senate Republicans with a narrow margin and later approved by House Republicans before being sent to the president for signature. The bill offers over $4 trillion in net tax cuts over a decade, with the majority of benefits favoring higher-income households. It also includes cuts to social safety net programs like Medicaid and food stamps.

Key provisions of the bill include extensions of the 2017 tax cuts, reductions in income tax rates, exemptions for wealthy estates, and tax breaks for business owners. Additionally, the legislation limits the deduction of state and local income taxes and property taxes to $40,000 per year. This “SALT” policy disproportionately affects residents of states with high tax rates, while benefiting those in states without state income taxes.

While the wealthiest households in states like Wyoming, South Dakota, and Texas stand to gain significantly from the tax cuts, residents of high-tax states like California and New Jersey are projected to receive smaller tax cuts in 2026. Separate analyses have shown that the top 20% of households would benefit the most from the GOP bill, with the bottom 20% seeing minimal tax cuts.

Overall, comprehensive analyses suggest that while high-income earners may benefit from the tax cuts, lower-income individuals could face negative consequences due to cuts in essential programs. The implications of the tax legislation extend beyond income tax changes, highlighting the complex and far-reaching impact of fiscal policies on different socioeconomic groups.