New Analysis from The Budget Lab at Yale
Combined Distributional Effects of the One Big Beautiful Bill Act and of Tariffs (June 12, 2025, Updated: June 16, 2025)
Earlier today, the Congressional Budget Office (CBO) released a distributionalanalysis of the One Big Beautiful Bill Act (OBBBA) as passed by the House of Representatives. Importantly, CBO’s analysis considers the OBBBA in isolation, excluding (by design) the effects of other recent policy changes, like the Trump Administration’s tariff increases.
The Budget Lab has previously estimated the net budget impact of combining the OBBBA and recent increases in tariffs. A natural follow-up question is: what is the net distributional impact of both the OBBBA and tariffs? This report answers that question by incorporating tariffs into CBO’s distributional estimates of the OBBBA.
Read the analysis
Key Takeaways
1.The combination of 2025 tariff increases implemented as of June 1 and the One Big Beautiful Bill Act passed by the House of Representatives would reduce after-tax-and-transfer incomes on average among the bottom 80 percent of U.S. households.
2.The bottom ten percent of households would see an average reduction of more than 6.5 percent in incomes, while those at the top would see an increase of nearly 1.5 percent.
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