How H.R. 1, the One Big Beautiful Bill Act, Would Affect the Distribution of Resources Available to Households

Cash transfers consist of Social Security benefits, Supplemental Security Income, unemployment insurance, workers' compensation, income from the Temporary Assistance for Needy Families and State General Assistance programs, and changes to cash flows resulting from changes to student loan policy.

Deciles are created by ranking households by their size-adjusted income after transfers and taxes. A household consists of people who share a housing unit, regardless of their relationships. Each income decile (tenth) contains approximately equal numbers of people but slightly different numbers of households. If a household has negative income (that is, if its business or investment losses are larger than its other income), it is excluded from the lowest income group but included in totals.

Federal taxes consist of individual income taxes, payroll taxes, corporate income taxes, and excise taxes. In this analysis, taxes for a given year are the amount a household owes on the basis of income received that year, regardless of when the taxes are paid. Taxes from those four sources accounted for over 90 percent of federal revenues. The remaining federal revenue sources not allocated to U.S. households include states' deposits for unemployment insurance, estate and gift taxes, net income earned by the Federal Reserve, customs duties, and miscellaneous fees and fines.

Income after transfers and taxes consists of market income, social insurance benefits, and means-tested transfers minus federal taxes.

Market income consists of labor income, business income, capital income (including capital gains), income received in retirement for past services, and other nongovernmental sources of income.

Means-tested transfers are cash payments and in-kind services provided through federal, state, and local government assistance programs. Eligibility to receive such transfers is determined primarily on the basis of income, which must be below certain thresholds. The largest transfer programs are Medicaid and the Children's Health Insurance Program (CHIP, measured as the average cost to the government of providing those benefits), SNAP (formerly known as the Food Stamp program), and Supplemental Security Income.

Public goods are goods and services that share two main traits: If they are consumed by one person, the amount available to other people is not reduced; and it is difficult to prevent people from consuming them once they are available.

Social insurance benefits consist of benefits from Social Security (Old-Age, Survivors, and Disability Insurance), Medicare (measured as the average cost to the government of providing those benefits), unemployment insurance, and workers' compensation.