Trump's ‘Big Beautiful Bill’ Gives Top 1% Biggest Tax Breaks—Especially in These States

President Donald Trump has officially signed a sweeping tax overhaul into law—one that delivers massive financial gains to the nation’s wealthiest households, particularly those living in certain low-tax states. Dubbed the “One Big Beautiful Bill Act,” the legislation extends major provisions of the 2017 Trump tax cuts, slashes the social safety net, and reshapes the U.S. tax code for the next decade.

Top 1% See Major Gains—Depending on Location

According to a new analysis by the Institute on Taxation and Economic Policy (ITEP), the top 1% of U.S. households—those earning $917,000 or more annually—will receive an average tax cut of $66,000 in 2026. But in states like Wyoming, South Dakota, and Texas, that number skyrockets.

• Wyoming: Average tax cut of $133,000 (about 3% of income)

• South Dakota: Average cut over $100,000

• Texas: Also among the biggest beneficiaries

“The bill is most advantageous to conservative-leaning states that have a lot of very wealthy people living within their borders,” said Carl Davis, ITEP’s research director.

These states, notably, do not levy personal income taxes, further amplifying the benefit of the federal tax reductions for high earners.

Why the Wealthy Win Big

The bill delivers over $4 trillion in net tax cuts over a decade. Its core features include:

• Lower income tax rates

• Expanded estate tax exemptions

• Significant tax breaks for business owners

• Extension of Trump-era 2017 tax cuts

While the GOP argues these changes will stimulate growth and reward investment, critics point out that the largest windfalls are going to the richest Americans—and not equitably across the country.

In contrast, high-income residents of states like California and New Jersey will receive much smaller tax cuts, averaging $34,000 and $21,000 respectively—only about 1% of their income.

The key reason? The bill imposes a cap on the deduction for state and local taxes (SALT) at $40,000 per year. In high-tax states, this limitation significantly reduces the value of the federal tax break. But in states like Wyoming and Texas—where there's no state income tax—the SALT cap barely matters.

Impact on Lower Earners and Social Programs

The new law doesn’t just reward the top. It also comes with deep cuts to social safety net programs that lower-income Americans rely on:

• Billions cut from Medicaid

• Reductions to food assistance programs like SNAP

• Cuts to housing aid and other federal support systems

While the top 20% of U.S. households (earning $217,000 or more) will see an average after-tax income increase of 3.4%, the bottom 20% will only gain 0.8%, according to the Tax Policy Center.

More critically, when considering both the tax cuts and the spending reductions, lower earners are expected to end up worse off overall. Analyses by Yale University’s Budget Lab and the Congressional Budget Office highlight that the full package could deepen inequality and financial insecurity for millions of low-income households.

Political & Economic Implications

Signed along strict party lines—with Republicans narrowly pushing it through both chambers—the "Big Beautiful Bill" marks one of the most significant tax policy shifts in recent years.

Supporters claim it will stimulate economic growth, boost business investment, and maintain America’s competitiveness. Detractors argue it favors the rich, undermines essential services, and will add significantly to the federal deficit—with long-term consequences for economic stability.

Final Thoughts: Winners, Losers, and Long-Term Fallout

While many Americans will see modest tax relief, the real winners are the wealthy—especially those in no-income-tax states like Texas, South Dakota, and Wyoming. Meanwhile, middle- and lower-income households may experience temporary relief, only to face deeper financial hardship due to cuts in essential services.

As we head into an election cycle, this tax overhaul is likely to remain a flashpoint in the debate over economic fairness, wealth inequality, and the role of government in redistributing wealth.