Figure 1
Cutting Medicaid to pay for tax cuts benefits top 1% while harming the bottom 40%: Change to average household income stemming from proposed Medicaid cuts and extension of Tax Cuts and Jobs Act (TCJA)
| Medicaid cut | TCJA cut | |
|---|---|---|
| Bottom fifth of household income | -7.4% | 0.6% |
| Second fifth of household income | -1.7% | 1.0% |
| Top 1% of household income | 0.0% | 3.9% |
Note: In these estimates, we assume the federal share of Medicaid spending is unaffected by these cuts. In theory, states could make their contribution to Medicaid more generous to make up for federal cuts, but this would require that they raise taxes to do this.
Source: Data on value of Medicaid and household income from Congressional Budget Office (CBO) Distribution of Household Income in 2021. Data on proposed $880 billion in Medicaid cuts on overall Medicaid spending based on CBO data on budget projections. Distribution of gains from extending expiring TCJA provisions from Office Tax Analysis report.
This chart appears in:
- The House Republicans’ plan to cut Medicaid to pay for tax cuts for the rich would slash incomes for the bottom 40%: See impact by state
- Cutting Medicaid to Pay For Low Taxes on the Rich Is a Terrible Trade for American Families: FIGURES
- Testimony prepared for the U.S. House of Representatives Full Committee on Education and the Workforce for a hearing titled “Unleashing America’s Workforce and Strengthening Our Economy”
- Cutting Medicaid to pay for low taxes on the rich is a terrible trade for American families
Next chart: Medicaid cuts as share of average household income by state »