One Year Later: How OBBBA’s Tax Cuts for the Rich Have Weakened Democracy

One year ago this week, President Trump—the richest president with the richest cabinet in US history—signed the so-called One Big Beautiful Bill Act (OBBBA) into law. In the year since, the bill has not only increased inequality but weakened our democracy, which already rested on a shaky foundation.

For the wealthy, the bill was, indeed, beautiful. A reduced top marginal tax rate, no tax on estates worth up to $15 million, and more corporate tax loopholes have left the richest 1 percent better off to the tune of $66,000 a year. To allegedly pay for those tax cuts, policymakers slashed healthcare and food benefits for low- and middle-income families, leaving the lowest-income decile with, on average, $1,600 less per year—equivalent to a 3.9 percent drop in income. Many of the 15 million people projected to lose health insurance have already done so.

In the past year, wealth concentration has only increased. Last month, Elon Musk became the world’s first trillionaire, in part by using his government influence to bend the rules (and in part by putting our retirement accounts on the line by forcing index funds to include his companies, leaving us on the hook if they crash). Trump has enriched himself by at least $1.4 billion dollars since re-entering public office. And as billionaires have grown even richer, they have used their fortunes to consolidate their hold not just on our government and economy, but on information itself.

If we want that democracy to survive another 250, we need to change course.

The OBBBA was the latest tax cut in a 50-year destructive cycle: tax cuts for the rich fueling increasing wealth concentration, enabling them to lobby for yet more tax cuts. Decades of trickle-down economic policy have left the US with lower top rates and more loopholes. Meanwhile, trillions of dollars of wealth goes untaxed, as the ultra-wealthy use “buy, borrow, die” and “buy, save, die” strategies to pass on wealth to their heirs, creating dynasties that further concentrate wealth over time. The wealthiest US households now pay less than half the effective tax rate they did in the 1950s, and pay lower rates, by far, than the average household.

And while campaign finance rules used to limit the influence of money in politics, the Supreme Court has gutted restrictions on political spending, allowing the ultra-wealthy to channel their money directly into political power. Today, the richest Americans regularly pay no income tax at all, instead diverting a fraction of their funds to political campaigns so they can influence government policy in their own interest, rather than help pay for programs that actually serve the public. The result is a democracy increasingly subject to the whims of a select few, a government starved of essential revenue, and a record-low sense among Americans that the taxes we pay are fair.

As Roosevelt Institute President and CEO Elizabeth Wilkins wrote in a March blog post, a progressive tax code should do three things at once. It should provide the revenue our government needs to deliver the building blocks of good lives for people: security when we retire, care and education for our children, investments in our homes and infrastructure. It should “prevent extreme concentrations of wealth from distorting power and the economy.” And it should foster a sense of “shared national purpose,” reinforcing our ties to each other and to our government.

Tax cuts for the rich accomplish the opposite. As Wilkins wrote, “our shared social compact and prosperity depend on our tax code.” Our country’s first 250 years have shown us that when we deploy it in service of these goals, our democracy is stronger. If we want that democracy to survive another 250, we need to change course.