R-La. House Speaker Mike Johnson returns to his office to speak to the reporter as he waits for President Trump to vote for the “Big Beautiful Bill” settlement package on July 3, 2025.
Bill Clark | CQ-Roll Call, Inc. |Getty Images
The massive tax cut package that President Trump defends and awaits a final vote in the House will be rampant for the wealthiest US household. However, new analysis of taxation and economic policy shows that the scale of its financial profits is heavily dependent on where high-income taxpayers live.
The law will give the top 1% of US households an average tax cut, or about 2.4% of their income, in 2026, according to ITEP, a left-leaning think tank. (These households said they earn more than $917,000 a year, with an average of about $2.7 million.)
Some households stand to get much greater tax benefits.
ITEP has found that the richest households in three states (Wyoming, South Dakota and Texas) have fallen by more than $100,000 in annual tax bills.
In Wyoming, the top 1% will see taxes fall the most. It states that it averaged around $133,000 (or 3% of income) in 2026. The state’s top 1% has an average income of around $4.5 million.
“This bill is most advantageous for the state of conservatives, with many very wealthy people living within the border,” said Carl Davis, ITEP’s research director.
These states also do not collect personal income taxes, he said.
Wyoming and Texas are “classic examples of states with many wealthy people, and they tax those wealthy people incredibly lightly,” Davis said.
Why wealthy people get massive tax cuts
Senate Republicans first passed a law called One Big Beautiful Bill Act. House Republicans passed the bill on Thursday and are poised to send it to the president for his signature.
The law has provided net tax cuts of over $4 trillion over a decade, with most profits coming from high-income households, the analysis finds. It also aims to reduce social safety nets, cut billions of dollars from programs like Medicaid and food stamps, and lower earners.
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The central part of the bill is the extension of the 2017 tax cuts enacted during President Trump’s first term.
Overall, the law lowers income tax rates, exempts larger shares of wealthy properties from taxation, and provides tax deductions to employers. These are one of the central ways that the GOP bill can benefit high-income households, Davis said.
It also limits the amount of state and local income and property taxes that households can deduct from their taxable income annually to $40,000.
That “salt” policy does not adversely affect wealthy residents of states such as Wyoming, South Dakota and Texas. There, residents are not borrowing state income taxes, Davis said. However, it has a major impact on states with high state and local income and property taxes.
In other words, high-income residents in Wyoming, South Dakota and Texas generally earn a majority of their taxes and are not so flawed, he said.
Conversely, the highest earners in California and New Jersey saw fewer tax cuts in 2026, with an average of around $34,000 and $21,000 respectively. This represents about 1% of each state’s income.
Individual analysis shows that the wealthiest households will enjoy the greatest financial benefits from the GOP bill.
According to the Tax Policy Center, the top 20% of US households (over $217,000 a year) will receive a tax cut equivalent to 3.4% of their 2026 post-tax income. Meanwhile, the bottom 20% will receive a tax cut of 0.8%.
That analysis looked at only the tax portion of the law.
Overall, a more comprehensive analysis taking into account the reductions in programs such as Medicaid and Supplementary Nutrition Assistance Programs modeled similar laws passed in the House of Representatives last month, according to an analysis by Yale University’s Budget Lab and the Congressional Budget Office.
