The NPR Politics Podcast

How President Trump's Tax & Spending Law Will Affect Americans' Wallets

46 snips
Jul 7, 2025
Scott Horsley, NPR's chief economics correspondent, brings his expertise to dissect President Trump's tax and spending law. He reveals how the legislation offers limited savings for middle-income families amidst growing federal debt. The discussion also highlights the political maneuvers surrounding tax cuts, including potential impacts on Social Security and Medicaid. Furthermore, Horsley addresses rising interest rates and how tariffs could counteract any tax relief. Tune in for a lively exploration of how these changes could shake up Americans' financial futures!
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INSIGHT

Trump's Tax Law Mostly Helps the Wealthy and Adds to the Deficit

The recent tax and spending law signed by President Trump mainly extends previous tax breaks and adds new temporary cuts, but most benefits go to the wealthy.

Scott Horsley explains that about 60% of the savings go to the top 20% of earners, while middle-income families see smaller gains, and those earning under $55,000 may be worse off due to cuts in safety net programs.

The law is not expected to give a significant boost to the economy, and as it adds trillions to the deficit, it will likely raise interest rates, increasing borrowing costs for consumers in housing and business.

Despite the tax savings, tariffs and future Medicaid cuts could offset or worsen the financial impact on many Americans.

Politically, this law mainly serves as a win for Trump, demonstrating his control over the Republican party rather than addressing economic concerns for his new voter coalition.

INSIGHT

Tax Breaks Favor the Wealthy

  • Most tax savings from the new law go to the top 20% of earners, especially the wealthy.
  • Lower-income individuals may be worse off due to cuts in safety net programs outweighing tax benefits.
INSIGHT

Law May Not Boost Economy Much

  • The new tax and spending law isn't expected to significantly boost the economy.
  • It adds to the federal debt, which may lead to higher interest rates and slow growth.
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