President Donald Trump’s major tax-cut plan would shift wealth from younger Americans to older generations, according to nonpartisan analysts. While the proposal includes benefits for
families with children and young workers, the long-term financial impact—especially its addition of trillions to the $36.2 trillion national debt—could hurt younger generations the most.
“This effectively leaves future generations holding the bag,” said Kent Smetters, director of the Penn Wharton Budget Model. Their analysis found that a 40-year-old earning a median income would lose about $7,500 over a lifetime, while a 70-year-old with the same income would gain around $17,500.
The imbalance stems from several factors:
- Younger workers, often lower earners, would see fewer benefits from income tax cuts.
- Cuts to student aid and Medicaid—used for about 40% of U.S. hospital births—would hit young families harder.
- Rising debt could drive up interest rates, increasing the cost of homeownership and everyday expenses over time.
“There is an obvious intergenerational transfer here,” said John Ricco of the Yale Budget Lab. His team projects the bill could add $4,000 annually to mortgage costs by 2055—when today's newborns reach age 30.
Republicans argue the bill promotes long-term growth and helps younger Americans by stabilizing Medicaid and encouraging entrepreneurship. It also includes targeted breaks such as tax exemptions for tipped and overtime income—benefiting service and hourly workers—and proposes $1,000 savings accounts for newborns and an expanded child tax credit.
House Republicans, including Rep. Steve Scalise, claim a typical family with two children could see take-home pay rise by $4,000 to $5,000. However, critics note this estimate ignores rising costs for health care, student loans, and essentials caused by spending cuts elsewhere in the bill.
Moreover, the benefits are unevenly distributed. Most low-income families—and half of seniors—earn too little to qualify for many of the bill’s tax breaks. However, wealthier older Americans stand to benefit significantly, especially with Medicare and Social Security left untouched.
These two entitlement programs are growing rapidly and expected to face funding shortfalls by 2033. Despite this, both Trump and Democratic leaders have vowed to avoid restructuring them, leaving younger Americans to face the eventual consequences.
"Both parties have been practicing intergenerational theft for years," said Jessica Riedl of the Manhattan Institute. Photo by Gage Skidmore from Surprise, AZ, United States of America, Wikimedia commons.