Funding our Futures Despite Trump’s Big Ugly Megabill

Funding our Futures Despite Trump’s Big Ugly Megabill

Written by Ida Eskamani

Trump’s Big Ugly Megabill is a budget dream come true for billionaires and corporate lobbyists and a nightmare for states. The nearly 900-page bill poses brutal consequences, especially for working class people:

• It increases poverty and hunger.
• It raises families’ food and healthcare costs.
• It takes health coverage away from 17 million people.
• It drives up deficits and passes tremendous costs onto states.

All of this is to give costly tax cuts to the wealthy and corporations and to expedite Trump’s inhumane anti-immigrant agenda. According to Yale University’s Budget Lab, people in the lowest income bracket will see their incomes drop by 2.9% while the highest earners will see their incomes rise by 2.2% as a result of cuts to SNAP and Medicaid. It’s also important to note that the harm by Trump’s Megabill is compounded by Trump's rescission of already allocated spending, including to public media and education.

Tax cuts now, benefits cuts later — the implementation timeline
Generally speaking, the permanent tax cuts for the ultra-wealthy will take effect immediately while the benefit cuts will not be implemented until well after midterm elections. For example: 

• The law paves the way for numerous tax changes with the most significant being to the cuts Trump enacted during his first term in 2017. Those expiring tax cuts are permanent, effective immediately.
• Medicaid’s funding changes under the law are not scheduled to take effect until 2028, well past the upcoming 2026 midterm elections. Some work requirements could come earlier, however. Those are to begin no later than Dec. 31, 2026.
• The Megabill forces states to shoulder at least 5% of SNAP benefit costs starting in 2028. Currently, the program is 100% federally funded. The SNAP cuts total an estimated $230 billion over 10 years.
• Proposed changes to the Affordable Care Act take effect in 2026 and could result in millions more people losing coverage, increasing the estimated number to 17 million.
• The law eliminates numerous tax incentives from the 2022 Inflation Reduction Act for clean energy and energy efficiency programs. Under the law, $7,500 tax credits for electric vehicles will be eliminated starting Sept. 30 of this year.

Resources for state legislators to lead
Because proponents of the bill are dead-set on shifting the harm and blame to states, state tax justice champions are critical at this moment. Over the next decade, the top 1% are set to receive $1 trillion in tax cuts from Trump’s Megabill. That’s funding working families depend on, left on the table by a federal government beholden to the ultra-wealthy. States should tax it. Here are some resources to support state legislators to take the lead.

• Threats and Opportunities Facing State Budgets in 2025, State Innovation Exchange
• Black Women Best Framework Points the Way to Equitable and Just State Tax Reform, Center for Policy & Budget Priorities
• States Can Fight Corporate Tax Avoidance by Requiring Worldwide Combined Reporting, Center for Policy & Budget Priorities
• Tax the Rich: Implementing a State Tax on Investment Gains, State Innovation Exchange
• Tax Payments by Undocumented Immigrants, Institute on Taxation and Economic Policy
• Financial Exposure: Rating the States on Economic Development Transparency, Good Jobs First (See also: State Strategies to Challenge Corporate Subsidies & Shutting Down Data Center Subsidies)
• States Should Enact, Expand Mansion Taxes to Advance Fairness and Shared Prosperity, Center for Policy & Budget Priorities & Institute on Taxation and Economic Policy
• Tax Policy Polling and Modeling District Lookup Tool, State Revenue Alliance
• Next Generation Democracy & Resource Library, Participatory Budgeting Project

Also, check out SiX’s webinar “Funding our Futures: Tax Justice in the States,” co-organized with the State Revenue Alliance (SRA), to see an overview of state tax justice in 2025 in terms of its progress, challenges, and trends. In the webinar, we break down specific tax bills from state legislative sessions and learn from a panel of state elected and advocates, who share lessons from the most recent legislative session and strategies for how states can lead on revenue in the future.

In our advocacy for tax justice at this moment, it’s also important to understand how federal and state budgets traditionally interact. Here are some foundational resources: 

• Who Gives and Who Gets? Explore the Balance of Payments between States and the Federal Government, Rockefeller Institute of Government
• Who Pays? 7th Edition (see where your state ranks!), Institute on Taxation and Economic Policy
• Tax Payments by Undocumented Immigrants, Institute on Taxation and Economic Policy
• Work Requirements Don’t Work, Center for Policy & Budget Priorities
• SNAP: State-by-State Data, Fact Sheets, and Resources, Center for Policy & Budget Priorities

What the public is saying
According to PBS, a new AP-NORC poll finds that most US adults think the Megabill will help the wealthy more than low- and middle-income Americans. Roughly two-thirds say the law will benefit the rich while about six in ten believe it will harm low-income individuals. Polling consistently shows that the public supports raising taxes on corporations and ultra-wealthy individuals.

How we talk about Trump's Megabill
The American people are already struggling with high prices. Trump’s Megabill, along with Trump's tariffs, inflation, and attacks on immigrant workers, will make things even worse by raising costs on families and taking health care and food assistance away from people who need support. Instead of gutting these popular programs to pay for enormous tax cuts for the wealthy, elected leaders should make the wealthy pay what they owe in taxes and help people across the U.S. afford the basics like health care and groceries. When available and with their consent, center real stories from your constituents. 

Understanding the impacts of Trump’s Megabill:

• State Analysis of Tax Provisions in the Trump Megabill as Signed into Law, Institute on Taxation and Economic Policy
• Not Just a Budget Cut: How 17 Million Lives Are Being Harmed by “One Big Beautiful Bill”, Families USA
• Health Provisions in the 2025 Federal Budget Reconciliation Bill, KFF 
  • Impact on people with disabilities, CAP & The Arc
  • States Brace for Reversal of Obamacare Coverage Gains, KFF News
  • How Trump’s Megabill will impact health care, The Hill
• Nine Ways the Budget Bill Will Make Life More Expensive, Groundwork Collaborative
• SNAP Cost-Share: 10 Things to Know, Food Research & Action Center
• Power prices are expected to soar under new tax cut and spending law, NPR
• What the Megabill will change for students, schools and colleges, NPR 
• The Anti-Immigrant Policies in Trump's Megabill, National Immigrant Law Center
•  Protecting Immigrant Communities: A Toolkit for State Action, State Innovation Exchange 

Collaborative governance is the only way out
As Ian Bassin of Protect Democracy reminds us in this important piece, history and the present day teach us the only way out of autocracy is through collective action. While the Trump administration concentrates power over our democracy and economy in the hands of the elite few, it is essential that legislators and organizers work in collaboration towards expanding democracy and economic opportunity for all. State tax fights offer an opportunity to advance this agenda. Think about a legislator or partner not already in the tax justice fight, and invite them to join us. 

SIX’s Economic Power Project:  
SiX’s Economic Power Project is SiX's national economic justice initiative, organizing legislators committed to building economies that empower people and advance justice. We recognize that the concentration of corporate and billionaire power in the economy did not happen by accident nor is it the result of inevitable forces. That harmful concentration of economic and political power is a product of deliberate policy choices over decades. At SiX, we know another world is possible – where our economies center people, not corporate and billionaire profits. And that world starts in the states. Learn more and join here.