Republicans want you to pay more for less

Donald Trump's policies are punishing the poor, rewarding the rich, inflating prices, and shrinking revenues. And for what?

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In the early hours of Thursday, May 22, with the sun just peaking over the horizon in Washington, D.C., Republicans in the House of Representatives passed Donald Trump's "Big, Beautiful" budget reconciliation bill. The proposed budget permanently extends some of Trump's 2017 tax cuts, raises the State And Local Tax deduction, increases spending for the Pentagon, and adds work requirements and other administrative barriers to Medicaid and the Supplemental Nutrition Assistance Program (“food stamps”) — the latter of which gets a huge 30% cut.

If passed, the bill will decrease the effective after-tax income of poor families, increase the income of the wealthiest Americans, and increase the size of the federal budget deficit by trillions of dollars.

It is worth noting that the GOP budget bill is not popular. In our May Strength In Numbers/Verasight poll, just 14% of Americans approved of cutting Medicaid to finance tax cuts. And according to a model from Data for Progress, there is no congressional district in America where more than 15% of voters support cutting back on SNAP:

Americans think this is a bad bill. And after taking a hard look at it, I think so, too.

. . .

I try not to be too partisan here, but this issue is personal for me. When I was very young, growing up poor in central Texas, my parents took child health insurance benefits and food assistance (WIC) for me and my three siblings (three of us, including myself, are triplets!). I have seen firsthand the positive impacts that government assistance programs can have on needy families. Compared to other political analysts, I think that gives me a unique perspective on the value of these programs to everyday Americans. Cutting them is cruel.

And besides that, sometimes the data leans too clearly in one direction not to come to the obvious conclusion. This is one of those cases. SNAP for example has positive economic ROI, not just for individuals but for communities, and there are insanely positively skewed long-term impacts of keeping babies from starving (see WIC).

Regardless of your general left-right orientation toward benefits, I find it unconscionable that a party would cut these benefits while undercutting several other stated policy goals. In particular, the cuts to spending in the reconciliation bill only partially offset the drop in revenue from tax cuts, and the GOP has chosen to increase spending in other areas, fully negating the cuts out of the gate. This is the clearest case in a generation where the GOP is putting the wealth of the rich ahead of the needs of the poor.

So, I felt like I needed to use my platform to say something about this bill. The mission of this publication is to relentlessly pursue truth through data and empirics, regardless of the cost — and that includes the perception of partisanship.

In my opinion, the Republican Party under Trump is pursuing an economic agenda that can be summed up in five words: "You pay more for less."

That, and more, in this week's Chart of the Week.

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1. A budget that hurts working families and helps the rich

For the uninitiated, the reason we know how a bill will affect families is because a non-partisan government organization called the Congressional Budget Office will analyze — or "score" — legislation before it is passed. Any member of Congress can request the CBO score a bill, and the estimates are very good (as good as you can get in estimating the impacts of legislation in a country as big and bureaucratically complex as the U.S.).

The CBO estimates that the GOP budget bill will actually decrease the after-tax income of the poorest Americans, while increasing incomes for the richest. It produces this chart in its report:

This chart shows that the Republican bill would reduce household incomes for the poorest 10% of Americans by 2% in 2027. The decrease then grows to 4% in 2033. These cuts are largely due to the interruption of Medicaid and food stamp benefits due to new administrative burdens and work requirements, which prevents little to no fraud and takes benefits away from families who are busy or don't have the right forms to complete their paperwork.

Meanwhile, according to the CBO, the bill would increase household incomes for the richest 10% by 4% in 2027, and by 2% in 2033.

The chart from the CBO is good, but it doesn't give you a sense of the scale of the economic redistribution going on under the hood. Households in the bottom income decile make much less than those in the top 10%; A cut of 2% of benefits for the poor is about $500 per family, while the top 10% gain about $50,000 in income.

If you rescale the chart above so that it shows us the impact on dollars of income, which matters more to poor families than percentages, you begin to see the full magnitude of the upward wealth redistribution (from poor to rich) in the GOP bill. I have sized the graph below so that each $1,000 is represented by about 6 pixels, or roughly $25,000 per inch of vertical chart. These numbers are from the Wharton budget model. Behold the extra-tall Chart of the Week:

Take some time to digest this. The Republicans in government are asking you to let them take food out of the literal mouths of babes, in order to increase the pay of the top 0.1% of Americans by $389,000. All while pumping an additional $150 billion into the Pentagon and increasing our budget deficit by $3.8 trillion over the next decade.

In other words, by decreasing the amount of tax revenue it gathers from the ultra-rich, decreasing the transfers it makes to the poor, and increasing its overall spending, Republicans are asking middle-income and poor families to shoulder a much larger share of the federal deficit — all while they get less from the government. They are asking you, in summary, to pay more for less.

2. Tariffs and inflation

A second area where the Republicans are asking you to pay more for less, literally, is for imported goods subject to tariffs. According to math by Joseph Palitano, the effective tax on U.S. imports from Trump's tariffs is around 15% today, significantly higher than the 2-3% at the start of his term.

Who pays the extra 12%? For the most part, we do — and the impact is felt disproportionately by poor people, who consume more goods than services and spend a higher percentage of their incomes on household necessities than the rich. A $100 grocery bill is a smaller share of income for a family making $250,000 than for a family making $25,000.

Several big retailers are saying price hikes are coming. Walmart accounted this week that Trump's tariffs have forced them to raise prices. Many such cases.

The Yale Budget Lab estimates that Trump's tariffs could cost the average low-income taxpayer about 5% of their annual income:

Needless to say, this is not the policy agenda of a populist political party that wants to revive the middle class. To the extent that voting for Republicans is coded as a blue-collar behavior today, the policy agenda of the Republican Party is a remarkable betrayal of that working-class base. Their 2026 budget is a massive subsidy of the rich, paid for with money taken from the poor. For the poor, that means spending more, for less.

3. The “Department of Government Efficiency” is not cutting government spending

Finally, we get to DOGE. Here, I will rehash my earlier piece (carved out of an early draft of this article) on the negative returns to the U.S. taxpayer of Elon Musk's “reforms”:

Real government spending has gone up by $120 billion since this point last year — or 12 with ten zeroes, 120,000,000,000. That is not an insignificant number; it is about ten times as much as the U.S. spent on the Agency for International Development last year, for example.

Of course, an increase in the overall budget cannot be directly attributed to DOGE, just like a total decrease can not be credited to them without proof of cuts of this magnitude. It is possible, to be generous to Musk, that he really has saved $120 billion but spending in other parts of the government has increased.

But at the very least, Musk isn’t really delivering on what he’s selling. And he may in fact be hampering his own efforts: Take for example the tens to hundreds of thousands of firings and re-hirings DOGE has been responsible for. All the paperwork the government does to affect personnel changes must come with labor and other costs. The indiscriminate cuts also cause waste by virtue of leaving loose ends for other people to tie up. This is just an anecdote of course, but several of my friends in the government are working in half-empty offices with no official directives because their programs have shut down, but they have not been fired.

Then, there are the indirect costs we all incur when the Internal Revenue Service cannot effectively enforce the country’s tax laws. The Washington Post reported this week that DOGE-enforced cuts at the IRS will cost us all $500 billion in lost tax income, or about 10% of federal tax revenues. That’s primarily because of staff and other tech cuts, as well as the reorientation of some organizational progress to data-sharing instead of enforcement for tax cheats. For those keeping score, that is nearly four times the total savings DOGE claims on its website (itself a likely overestimate).

Given the decline in revenue, the DOGE return-on-investment calculation looks like this:

By targeting revenue-generating government departments, DOGE has decreased the amount of tax the government collects from rich cheaters. That means poor people constitute a higher percentage of the tax base. That’s paying more for less.

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And why should we pay more for less, anyway?

The point of this piece is not to say that Republicans are bad and Trump is only looking out for his rich friends, etc. You can make that argument if you want, but it’s not what I’m after here today.

Instead, what I want people to consider is that under Republican government, you are paying more and getting less: You are getting fewer services from the government and sending more of your tax dollars to military involvement overseas; A higher percentage of federal tax revenues is coming from you since the IRS does not have the manpower to chase down tax cheats; You are paying more for goods as a result of a flip-flop tariff strategy from the president that has increased uncertainty, disincentivized building, and extracted nearly zero trade concessions from foreign governments.

The cuts to Medicaid and SNAP in the Republican budget are only the latest examples of the modern GOP’s regressive fiscal and social spending policy.

And why should we have to pay more for less, anyway? We are the greatest country on Earth, the most prosperous nation to ever exist. We are being told to hold our noses while the incumbent government punishes poor people... for what, exactly? It's one thing to pursue a punitive and regressive tax policy as a way to decrease the budget deficit. It's another thing to do this for essentially no reason whatsoever, while saddling Americans with more debt, and leaving all of us (except the top 0.1%) worse off.

The GOP Budget bill now heads to the Senate, where it can afford to lose 3 Republican Senators and still pass.

Whatever you think of the other goals or ideological pursuits or the Republican Party, I want you to internalize this fact and the following question. Republicans want you to pay more, and get less. Why should you?

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Subscriber posts from this week

In other news, in an attempt to make presidential job approval ratings more electorally impactful and meaningful in the real world, I have whipped up a very simple model to estimate President Donald Trump’s approval rating in every state based on his national net job approval rating— currently at -8 (44% approve, 52% disapprove). I shared this data with paying subscribers on Wednesday, and it goes fully public today.

Mapping Trump’s national rating onto the states is relatively straightforward. The underlying statistical model I’m using simply adjusts the margin between Trump and Kamala Harris in each state in 2024 against the president based on the difference between his margin in the national popular vote (+1.5) and his current net rating.¹

Currently, according to this model, Trump is underwater in every state that went for him in 2024 by less than 9.7 points (8.2 - -1.5). That includes all the battlegrounds, up to Ohio but not including Florida, Texas or Alaska (which voted to the right of Ohio in 2024 — something of a stunner!).

Note how close Ohio, Alaska, Texas, and Florida are to turning orange.

In my opinion, this model is not the best way to estimate Trump’s approval rating at the state level. The best way would be to blend this prediction with an estimate from something like an MRP model that is trained on large amounts of survey data. Until recently, I did not have access to raw survey data, but now that we have our Strength In Numbers/Verasight poll, this is very much the next step.

Heads up, it will take some time (at least a few weeks) to get those models up and running well, though. I did something similar a long time ago for a piece that was supposed to run in the Times around the time I published my book, but they never published it.

For now though, the simple model is a close approximation of other published fancy estimates. If you want to know what public opinion is at the state level, the parsimonious estimates are currently better than only having national numbers.

These charts are interactive and update hourly on the Strength In Numbers data portal.

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• I also wrote a long paywalled post on Tuesday about polling accuracy in 2024.

• We’ve also been chatting a lot about modeling etc on the subscribers-only Strength In Numbers Discord server.

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