The New Tax Law Fuels Inequality, Strips Healthcare, and Displaces Black Communities

July 9, 2025

The legislation signed by President Trump on July 4, which Senator Tim Scott praised as fiscally responsible, has been criticized as a plan that concentrates wealth and negatively impacts Black communities. Independent analyses project the law will significantly increase the federal deficit through permanent corporate tax cuts and expanded defense spending, potentially leading to cuts in essential assistance programs. While Scott claimed the law delivers tax relief to working people, studies indicate the wealthiest households will receive the majority of benefits, with middle-income families seeing only temporary reductions.

Who is affected

Black families and communities
Middle-income households
Low-income children and students in public schools
Long-time residents and small businesses in neighborhoods designated as Opportunity Zones
Recipients of Medicaid, SNAP, and housing assistance programs
More than 17 million people who may lose healthcare
Families who previously benefited from the expanded Child Tax Credit

What action is being taken

Permanent corporate tax cuts are being implemented
Defense spending is being expanded
The Opportunity Zone program is being permanently expanded
A new permanent school choice tax credit is being established
Section 899, which imposed penalties on certain foreign-owned corporations, is being repealed

Why it matters

This legislation potentially widens wealth disparities by providing more significant tax benefits to the wealthiest households while offering only temporary relief to middle-income families. The law could trigger future cuts to essential assistance programs like Medicaid, SNAP, and housing assistance that many Black families rely on. The Opportunity Zone expansion may accelerate gentrification rather than reduce poverty, while the school choice tax credit could divert funding from public education. Additionally, the law allows the expanded Child Tax Credit, which had reduced Black child poverty, to remain expired while making corporate tax advantages permanent.

What's next

No explicit next steps stated in the article

Read full article from source: The San Diego Voice & Viewpoint