Trump’s Big, Beautiful Bill Is Great for the "Stealthy Wealthy"

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May 28, 2025

Guest

Maya MacGuinneas

Guest

Eric Zwick

Eric Zwick, an economist from the University of Chicago specializing in tax policy, joins Maya MacGuineas, president of the Committee for a Responsible Federal Budget, to dissect the recent tax and spending bill. They discuss its sweeping impact, from eliminating certain taxes on overtime and tips to creating new child savings accounts. The duo critically examines how this legislation extends tax cuts benefitting the wealthy while slashing funding for Medicaid and SNAP, raising pressing questions about inequality and its implications for national debt.

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INSIGHT

Bill's Massive Fiscal Impact

The tax and spending bill combines a $5 trillion tax cut primarily benefiting the wealthy and corporate sector.
It reduces Medicaid and food stamps by $1 trillion and will increase the national debt by several trillion over 10 years.

INSIGHT

Tax Cuts Boost Investment Modestly

The 2017 corporate tax cut caused firms receiving bigger cuts to invest more, especially large multinationals.
However, the effect on wages and GDP growth was modest and slower to manifest than proponents predicted.

INSIGHT

Limits of Corporate Tax Cuts

Despite being the largest business tax cut in history, the 2017 cut mainly returned money to shareholders rather than fueling large economic growth.
Cutting corporate taxes yields diminishing growth returns the lower the starting rate and when the economy faces capacity constraints.

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The tax and spending bill passed by House Republicans last week is the sort of bill that does so many different things that even budget experts could be forgiven for not realizing just how many different parts of the economy it will change.

In the realm of workers' comp, the bill would eliminate taxes on overtime pay and tips. In terms of families, it would create new $1,000 savings accounts for children and give parents an extra $500 per year per child, in the form of an expanded child tax credit. In the realm of health and the culture wars, it would ban the use of Medicaid funds for gender-affirming care and cut funding for Planned Parenthood. In the realm of climate, it would claw back half a trillion dollars of investments in wind, solar, geothermal, batteries, nuclear power, clean hydrogen, and electric vehicle purchases. In the realm of defense, it would increase spending by over $100 billion on shipbuilding, air and missile defense, immigration enforcement, and border security.

But judging strictly by the sheer dollar amount of the provision, this bill is really about three big things. Number one, it extends a multitrillion-dollar tax cut on corporate and individual income. Number two, it reduces federal spending on two major government programs by a combined $1 trillion: Medicaid, the government health-care program for those with low income, and SNAP, or federal spending on food stamps. And number three, because of the mismatch I just told you about, between the tax cuts and the spending cuts, it will increase the national debt by several trillion dollars over the next 10 years.

Today, we have two guests. First, the University of Chicago economist Eric Zwick joins to talk about the corporate tax cut. And second, to understand how to think about the debt picture, I talk to Maya MacGuineas, president of the Committee for a Responsible Federal Budget.If you have questions, observations, or ideas for future episodes, email us at PlainEnglish@Spotify.com.

Host: Derek Thompson

Guests: Eric Zwick and Maya MacGuineas

Producer: Devon Baroldi

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