{"id":35136,"date":"2025-07-03T11:15:11","date_gmt":"2025-07-03T11:15:11","guid":{"rendered":"https:\/\/www.europesays.com\/us\/35136\/"},"modified":"2025-07-03T11:15:11","modified_gmt":"2025-07-03T11:15:11","slug":"5-ways-trump-tax-and-spend-bill-would-affect-massachusetts","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/35136\/","title":{"rendered":"5 ways Trump tax and spend bill would affect Massachusetts"},"content":{"rendered":"

AS CONGRESS WORKS<\/strong> out its sweeping tax cut and spending legislation \u2014 the budget reconciliation bill also known as the One Big Beautiful Bill Act \u2014 the word \u201ccuts\u201d is being thrown around a lot. But in Massachusetts, should you expect to see cuts to the government programs you rely on?<\/p>\n

The giant policy bill has advanced through Congress with only Republican votes. After weeks of divisive debate, the U.S. Senate passed its version of the bill 51-50 on Tuesday and sent it backt to the U.S. House. Majority Leader John Thune and House Speaker Mike Johnson are eager to get it on President Donald Trump\u2019s desk before his July 4 deadline.\u00a0<\/p>\n

As factions in Congress go head to head over the Senate and House versions of the bill, people in Massachusetts wonder how it will impact their lives.\u00a0<\/p>\n

Five key pieces of the legislation that will impact Massachusetts \u2193\u00a0<\/strong><\/p>\n

Tax cuts: significant if you\u2019re high-income<\/p>\n

Tax cuts are one of the most talked-about items in the reconciliation bill. The Senate version of the bill looks to expand tax deductions, including raising the cap on deductions for state and local taxes (SALT, for short). Both bills extend the\u00a02017 Tax Cuts and Jobs Act<\/a>.<\/p>\n

Evan Horowitz, executive director of the Center for State Policy Analysis at Tufts University said for most people in Massachusetts, their experience of paying taxes will largely stay the same, because the bills mostly extend 2017 tax policies. But, he said, for people earning between $200,000 and $500,000, higher deductions on their state and local taxes would constitute a significant cut.\u00a0<\/p>\n

For tipped workers, about 2.5 percent of the US workforce, a new change eliminating taxes on tips could be a helpful cut, although it might impact fewer people than many realize. More than a third of tipped workers didn\u2019t make enough money to pay federal income taxes last year, according to the\u00a0Yale Budget Lab<\/a>, and half earn\u00a0less than $37,000<\/a>\u00a0a year. This means they can already claim the standard deduction, and receive other tax credits, such as the Earned Income Tax Credit and the Child Tax Credit.\u00a0<\/p>\n

Roughly 68 percent of the tax cuts in the House version go to the richest 20 percent in the US, according to the\u00a0Institute on Taxation and Economic Policy<\/a>.\u00a0<\/p>\n

While working-class families \u2014 the bottom 40 percent of earners \u2014 could expect an average tax cut of\u00a0$361 in 2027<\/a>\u00a0under the House proposal, the nation\u2019s highest-income families \u2014 the top 0.1 percent \u2014 would receive an average tax cut of at least $255,670 in that year, according to the Institute. These figures don\u2019t account for anticipated cuts to Medicaid and nutritional assistance, which could increase costs for working-class families.<\/p>\n

Viviana Abreu-Hernandez, president of the Massachusetts Budget and Policy Center, said she worries about how these regressive taxation policies, which see low-income people contributing a disproportionate share as compared to high-income people, will impact the\u00a0wealth gap in Massachusetts<\/a>. This wealth gap, Abreu-Hernandez said, is already made worse by sales taxes in Massachusetts, which have an outsized impact on low-income people.\u00a0<\/p>\n

Medicaid cuts: significant, especially for able-bodied adults<\/p>\n

The House version of the bill proposed changes to Medicaid that could deprive\u00a07.6 million people<\/a>\u00a0of health insurance. The Senate version would cut Medicaid even further.<\/p>\n

In the Southcoast Health system that serves New Bedford, most people are on public pay programs like MassHealth. This puts the region at\u00a0heightened risk<\/a>.<\/p>\n

Both bills propose work requirements for low-income, able-bodied adults on Medicaid. The Senate bill expands work requirements to the parents of older children as well. The requirement carries a heavy paperwork burden and would deny coverage at application if people could not demonstrate that they are employed, or otherwise engaged.<\/p>\n

Josh Archambault, the Pioneer Institute\u2019s senior fellow on health care policy, said this type of requirement would push people towards working.<\/p>\n

But others say limited research does not indicate work requirements increase employment. And advocates worry that many would lose health care.\u00a0<\/p>\n

\u201cIt\u2019s not just the feds saying, \u2018we won\u2019t pay.\u2019 You can\u2019t pay. These people are ineligible for Medicaid. You can\u2019t cover them,\u201d said Horowitz, of the Center for State Policy Analysis at Tufts University. \u201cIn some ways, it\u2019s actually a cost saving for the state. But I don\u2019t think it\u2019ll be treated that way. I think it\u2019ll be treated as a disaster \u2026 but it\u2019s not a budgetary problem, it\u2019s a welfare problem.\u201d<\/p>\n

Ultimately, Horowitz said, people who lose insurance will still need medical care, and those costs may eventually trickle back to the state. Uncompensated care costs, he said, will be a problem to watch over the next few years should work requirements pass through Congress.<\/p>\n

SNAP cuts: will mean significant changes to the state budget<\/p>\n

The bills look to push some costs of the country\u2019s Supplemental Nutrition Assistance Program onto the states. SNAP, or food stamps, helps pay for groceries for more than 12 percent of the country. In fiscal year 2024,\u00a0one in every six people<\/a>\u00a0in Massachusetts relied on SNAP, over half of them in families with children.<\/p>\n

Under the bills\u2019 legislation, states would have to cover a potentially large portion of SNAP funding. Horowitz worries some states may not be able to do so, opting instead to drop the portion they\u2019d have to fund.\u00a0<\/p>\n

\u201cMassachusetts is not that kind of state,\u201d Horowitz said. \u201cIt\u2019s hard to imagine a scenario where Massachusetts \u2026 doesn\u2019t fill in the missing federal dollars. \u2026 I think that will be a top state priority.\u201d<\/p>\n

Still, Horowitz said, the money to cover such a large expense has to come from somewhere, meaning other state programs face cuts.\u00a0<\/p>\n

Student financial aid cuts: uncertain \u2014 the House bill\u2019s changes are significant; the Senate\u2019s are not<\/p>\n

One such area could be student financial aid \u2014 one of the key topics the House and Senate disagree on.<\/p>\n

The House bill\u2019s restrictions on financial aid borrowing include cuts to Pell Grants. Massachusetts Gov. Maura Healey released a\u00a0statement<\/a>\u00a0which said the bill that passed the House would result in 42,000 Massachusetts students at public colleges and universities losing $57 million in federal financial aid annually.<\/p>\n

Healey, positioning Massachusetts as a hub for higher education and touting the success of the state\u2019s expanded MASSGrant Plus program, called on the Senate to reject the cuts.\u00a0<\/p>\n

While the Senate bill does bar students from qualifying for a Pell Grant if they\u2019ve received a full scholarship separately, it would not increase the credit hours required for full- and part-time students to receive Pell Grants.\u00a0<\/p>\n

Pell Grants are subsidized to help low-income students pay for higher education. The House bill would change eligibility requirements, causing reductions in aid and at least 10 percent of students nationally losing their grants completely. As the bill would eliminate Pell Grants entirely for students attending college less than half-time, community colleges would see the\u00a0greatest impact<\/a>.<\/p>\n

While important, Horowitz said making up for Pell Grant funding is not likely to be a priority for the state. As he sees it, if the House policies on this won out, the state would not be able to make up the funding.\u00a0<\/p>\n

Inflation Reduction Act cuts: significant for offshore wind<\/p>\n

Former President Joe Biden\u2019s 2022 climate bill, the Inflation Reduction Act, offered tax credits to clean energy projects such as wind and solar energy. That gave a big boost to the offshore wind industry, which has flourished on the South Coast. The Trump administration is seeking to end IRA tax credits, with legislation in both versions of the bill furthering this aim.<\/p>\n

As it stands, the House bill would require all energy projects receiving tax credits to begin within 60 days of the bill implementation, and be completed by 2028, before ending the credits for any other projects. The Senate version of the bill is softer on the IRA, giving projects until 2028 to begin.\u00a0<\/p>\n

Massachusetts Sen. Ed Markey\u00a0told State House News Service<\/a>\u00a0he was working with Republicans in the Senate to save IRA funding. Markey said he was especially focused on legislators from red states, \u201cbecause 80 percent of all that funding has gone to red states in the IRA, and it\u2019s already created 400,000 new jobs.\u201d\u00a0<\/p>\n

The Trump administration\u2019s clean energy cuts could have an\u00a0outsized impact<\/a>\u00a0on clean energy on the South Coast, and according to Kris Ohleth, director of the Special Initiative on Offshore Wind, the House cuts would only worsen those impacts.\u00a0<\/p>\n

The IRA made it easier to manufacture for clean energy in the US, Ohleth said, but current projects aren\u2019t safe from changes from sweeping tariffs or changing tax credit policies.\u00a0<\/p>\n

\u201cThere\u2019s a very small margin in profit for these offshore wind developers,\u201d Ohleth said. \u201cSo, any half percent change in the cost of steel, or whatever it might be, will ripple through the project and potentially make the projects unfinanceable.\u201d<\/p>\n

As the\u00a0demand for electricity soars<\/a>\u00a0in coming years, thanks to technology advancements like the use of artificial intelligence, Ohleth worries about the impact of slowing a \u201cshovel ready\u201d energy source like offshore wind, and its supply chain, for a minimum of four years.\u00a0<\/p>\n

\u201cIt\u2019s not just four years,\u201d Ohleth said. \u201cIt\u2019s four years, plus re-establishing that type of supply chain and market confidence that we are losing.\u201d<\/p>\n

This story was originally published by The New Bedford Light<\/a>, a nonprofit community news organization\u00a0in New Bedford.<\/p>\n

Abigail Pritchard, a graduate student in journalism at Boston University, is a summer intern covering state government for The New Bedford Light. She can be reached at\u00a0apritchard@newbedfordlight.org<\/a>.<\/p>\n

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