Tax Cuts in America 2026
The landscape of American taxation underwent transformative changes throughout 2025, marking one of the most significant fiscal policy shifts in recent history. The passage of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, represented a watershed moment for taxpayers across all income brackets, permanently extending provisions from the 2017 Tax Cuts and Jobs Act (TCJA) while introducing entirely new tax relief measures. This comprehensive legislation reshaped the relationship between American citizens and the federal tax system, delivering an estimated $3.4 trillion in tax cuts over the next decade before accounting for interest costs, which push the total fiscal impact beyond $4 trillion.
The 2025 tax reforms established permanent changes affecting everything from standard deductions to business expensing rules, while creating innovative provisions including the elimination of taxes on tips and overtime pay for eligible workers. With federal tax revenue projected at $5.2 trillion for fiscal year 2025 representing 17.1 percent of GDP, these tax cuts fundamentally altered America’s revenue collection trajectory. President Donald Trump announced in December 2025 his plan to issue $2,000 tariff dividend checks to middle-income Americans by mid-2026, funded by tariff collections that reached $37.5 billion in fiscal year 2026. Understanding the scope, scale, and distribution of these historic tax cuts remains essential for every American taxpayer navigating the transformed fiscal landscape.
Tax Cuts in America 2025: Key Facts & Statistics
| Fact Category | 2025-2026 Statistics & Data |
|---|---|
| Total Cost of Tax Cuts | $3.4 trillion over 10 years (2025-2034); $4.1 trillion including interest costs |
| Legislation Enacted | One Big Beautiful Bill Act (OBBBA) signed July 4, 2025, as Public Law 119-21 |
| Corporate Tax Rate 2025-2026 | 21% flat rate (unchanged, permanent since 2017) |
| Individual Tax Brackets | Seven permanent brackets: 10%, 12%, 22%, 24%, 32%, 35%, 37% |
| Standard Deduction 2025 | $15,750 (single), $31,500 (married filing jointly), $23,625 (head of household) |
| Standard Deduction 2026 | $16,100 (single), $32,200 (married filing jointly), $24,150 (head of household) |
| Child Tax Credit 2025 | $2,200 per qualifying child (increased from $2,000) |
| Additional Child Tax Credit | $1,700 refundable portion per child |
| SALT Deduction Cap 2025 | $40,000 (2025-2029) with income limitations; reverts to $10,000 in 2030 |
| SALT Deduction Cap 2026 | $40,400 (inflation-adjusted) |
| Senior Deduction Bonus | $6,000 additional deduction for taxpayers age 65+ (2025-2028) |
| Tips Income Deduction | Up to $25,000 deductible for qualified tips (2025-2028) |
| Overtime Pay Deduction | Up to $12,500 deductible ($25,000 married filing jointly) (2025-2028) |
| Auto Loan Interest Deduction | Up to $10,000 deductible for US-assembled vehicles (2025-2028) |
| Trump Account Contribution | $1,000 federal contribution for eligible children (2025-2028 births) |
| Trump Tariff Dividend 2026 | $2,000 checks promised for middle-income Americans by mid-2026 |
| Tariff Revenue FY 2026 | $37.5 billion collected (as of December 2025) |
| Estate Tax Exclusion 2025 | $13.99 million per individual |
| Estate Tax Exclusion 2026 | $15 million per individual (inflation-adjusted, permanent) |
| Federal Revenue FY 2025 | $5.2 trillion (17.1% of GDP) |
| Tax Returns Filed (2022) | 153.8 million returns |
| Individual Income Tax Collected (2022) | $2.1 trillion |
| Top 1% Tax Cuts 2026 | $117 billion (52% more than bottom 60% combined) |
| Average Tax Cut Per Household 2026 | $2,000 (from TCJA extension alone) |
| Federal Deficit 2025 | $1.9 trillion (6.2% of GDP) |
| National Debt Projection 2035 | $52.1 trillion (118% of GDP) |
Data source: Congressional Budget Office, Joint Committee on Taxation, Internal Revenue Service, Tax Foundation, U.S. Treasury Department, White House announcements
The statistics reveal the magnitude of America’s 2025 tax cut package, which represents the sixth-largest tax cut since 1940 when measured as a percentage of the economy. The $3.4 trillion cost over the decade reflects the permanent extension of expiring TCJA provisions combined with new temporary deductions that sunset between 2028 and 2029. With the corporate tax rate maintaining its 21% level established in 2017, businesses gained certainty while individual taxpayers saw immediate relief through increased standard deductions and enhanced child tax credits. President Trump’s announcement of $2,000 tariff dividend checks for mid-2026 adds another layer to the tax relief landscape, though this proposal requires congressional approval and faces fiscal challenges since tariff collections of $37.5 billion fall short of the estimated $600 billion cost if extended to all eligible Americans.
The enhanced provisions particularly benefit middle-income families, with the child tax credit rising to $2,200 per child and a new $6,000 senior deduction providing targeted relief to older Americans. The introduction of deductions for tips income (up to $25,000) and overtime pay (up to $12,500 for single filers) creates unprecedented tax advantages for service industry workers and hourly employees. Meanwhile, the elevated SALT deduction cap of $40,000 through 2029 delivers substantial benefits to taxpayers in high-tax states, increasing to $40,400 in 2026 with inflation adjustments. Distribution data shows 62% of filers experiencing reduced tax bills, though the top 1% receives $117 billion in tax cuts in 2026 alone—more than the bottom 60% of households combined. The estate tax exclusion jumps to $15 million in 2026, providing significant relief to wealthy estates.
Federal Income Tax Brackets in the US 2025
| Tax Rate | Single Filers | Married Filing Jointly | Head of Household |
|---|---|---|---|
| 10% | $0 to $11,925 | $0 to $23,850 | $0 to $17,000 |
| 12% | $11,926 to $48,475 | $23,851 to $96,950 | $17,001 to $64,850 |
| 22% | $48,476 to $103,350 | $96,951 to $206,700 | $64,851 to $103,350 |
| 24% | $103,351 to $197,300 | $206,701 to $394,600 | $103,351 to $197,300 |
| 32% | $197,301 to $250,525 | $394,601 to $501,050 | $197,301 to $250,500 |
| 35% | $250,526 to $626,350 | $501,051 to $751,600 | $250,501 to $626,350 |
| 37% | Over $626,350 | Over $751,600 | Over $626,350 |
Data source: Internal Revenue Service, Revenue Procedure 2024-40
The 2025 federal income tax brackets represent a permanently restructured progressive taxation system following the One Big Beautiful Bill Act’s passage. These seven tax brackets (10%, 12%, 22%, 24%, 32%, 35%, 37%) apply to income earned in 2025 for tax returns filed in 2026, with each bracket adjusted approximately 2.8% for inflation using the Chained Consumer Price Index. The bracket structure ensures that taxpayers only pay the higher marginal rate on income exceeding each threshold, not on their entire taxable income. For example, a single filer earning $100,000 in taxable income pays 10% on the first $11,925, 12% on income from $11,926 to $48,475, and 22% on income from $48,476 to $100,000, resulting in an effective tax rate substantially lower than their 22% marginal bracket.
The critical thresholds for 2025 include the $197,300 boundary for single filers and $394,600 for married couples, marking the transition from the 24% bracket to the 32% bracket—a significant jump affecting upper-middle-income taxpayers. The top 37% bracket applies only to extraordinarily high earners, beginning at $626,350 for single filers and $751,600 for married couples filing jointly. These permanent brackets eliminate the uncertainty that existed under the original TCJA sunset provisions, providing long-term planning certainty for taxpayers and businesses. The IRS’s inflation adjustment methodology ensures these brackets will continue rising annually, preventing “bracket creep” where inflation alone pushes taxpayers into higher tax brackets without real income gains. Without the OBBBA, these brackets would have reverted to pre-2017 rates of 10%, 15%, 25%, 28%, 33%, 35%, and 39.6% starting January 1, 2026, resulting in tax increases for 62% of taxpayers.
Federal Income Tax Brackets in the US 2026
| Tax Rate | Single Filers | Married Filing Jointly | Head of Household |
|---|---|---|---|
| 10% | $0 to $12,400 | $0 to $24,800 | $0 to $17,700 |
| 12% | $12,401 to $50,400 | $24,801 to $100,800 | $17,701 to $67,450 |
| 22% | $50,401 to $105,550 | $100,801 to $211,100 | $67,451 to $105,550 |
| 24% | $105,551 to $201,375 | $211,101 to $402,750 | $105,551 to $201,375 |
| 32% | $201,376 to $255,775 | $402,751 to $511,550 | $201,376 to $255,750 |
| 35% | $255,776 to $640,600 | $511,551 to $768,600 | $255,751 to $640,600 |
| 37% | Over $640,600 | Over $768,600 | Over $640,600 |
Data source: Internal Revenue Service, Revenue Procedure 2025-32
The 2026 federal income tax brackets reflect inflation adjustments applied to the permanent OBBBA framework, with lower brackets receiving approximately 4% increases and higher brackets rising by roughly 2.3%. These adjustments mean single filers can earn up to $12,400 before entering the 12% bracket (up from $11,925 in 2025), while married couples filing jointly shield $24,800 at the 10% rate. The differentiated inflation adjustment—with larger increases for lower brackets—represents a targeted policy decision to provide additional relief to lower and middle-income taxpayers. For instance, the threshold for the 22% bracket increases from $48,476 to $50,401 for single filers, allowing an additional $1,925 of income to be taxed at the lower 12% rate.
The 37% top bracket threshold rises significantly from $626,350 to $640,600 for single filers and from $751,600 to $768,600 for married couples—increases of $14,250 and $17,000 respectively. Beginning in 2026, taxpayers in the 37% bracket face a new limitation: their itemized deductions are capped at 35% value rather than 37%, meaning they receive only 35 cents tax benefit per dollar of deductions instead of 37 cents. This provision affects high-income itemizers who claim substantial charitable contributions, mortgage interest, or state and local taxes. The 2026 brackets will apply to income earned throughout 2026, with tax returns filed in early 2027. Treasury Secretary Scott Bessent confirmed that the administration expects 2026 to be the largest tax refund season ever, with refunds potentially including the proposed $2,000 tariff dividend checks for middle-income working families.
Standard Deduction Amounts in the US 2025
| Filing Status | 2025 Standard Deduction | 2025 Bonus Deduction (Age 65+) | Total for Seniors 65+ |
|---|---|---|---|
| Single | $15,750 | $6,000 | $21,750 |
| Married Filing Jointly | $31,500 | $6,000 (per filer 65+) | $43,500 (both 65+) |
| Head of Household | $23,625 | $6,000 | $29,625 |
| Married Filing Separately | $15,750 | $6,000 | $21,750 |
Data source: Internal Revenue Service, One Big Beautiful Bill Act provisions
The standard deduction for 2025 received substantial increases through the One Big Beautiful Bill Act, with amounts rising to $15,750 for single filers, $31,500 for married couples filing jointly, and $23,625 for heads of household. These figures represent increases of $750, $1,500, and $1,125 respectively over the previously scheduled amounts, providing immediate tax relief to the approximately 90% of taxpayers who utilize the standard deduction rather than itemizing. The enhanced standard deduction simplifies tax filing while ensuring more income remains untaxed, effectively raising the income threshold at which federal income tax liability begins. For a single filer in 2025, the first $15,750 of income faces zero federal income tax, while a married couple filing jointly shields $31,500 from taxation before any tax rates apply.
The revolutionary bonus deduction of $6,000 for taxpayers age 65 and older represents a targeted benefit addressing the unique financial circumstances of senior citizens. This additional deduction, available from 2025 through 2028, elevates the total standard deduction for elderly single filers to $21,750 and for married couples (both age 65+) to $43,500. Income limitations apply, with the full bonus deduction available only to single filers with modified adjusted gross income (MAGI) below $75,000 and married couples below $150,000, gradually phasing out at a 6% rate above these thresholds until complete elimination at $275,000 (single) and $550,000 (married). This provision impacts millions of senior citizens, particularly those paying taxes on Social Security income. The temporary nature of this provision means taxpayers must plan for its sunset after 2028 unless Congress acts to extend it. These enhanced deductions collectively reduce taxable income significantly, with the IRS confirming that both itemizing and non-itemizing seniors can claim the $6,000 bonus deduction.
Standard Deduction Amounts in the US 2026
| Filing Status | 2026 Standard Deduction | 2026 Senior Additional Deduction | 2026 Bonus Deduction (Age 65+) |
|---|---|---|---|
| Single | $16,100 | $2,050 | $6,000 |
| Married Filing Jointly | $32,200 | $1,650 (per filer) | $6,000 (per filer 65+) |
| Head of Household | $24,150 | $2,050 | $6,000 |
| Married Filing Separately | $16,100 | $1,650 | $6,000 |
Data source: Internal Revenue Service, Revenue Procedure 2025-32
The 2026 standard deduction amounts reflect a 2.2% inflation adjustment applied to the elevated 2025 baseline, resulting in $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household. These increases of $350, $700, and $525 respectively build on the substantial boosts provided by the OBBBA in 2025. The modest percentage increase reflects the lower inflation rate used for 2026 calculations compared to prior years when adjustments reached 7% (2023) and 5.4% (2024). The IRS used inflation data from the Chained Consumer Price Index to prevent bracket creep while maintaining real purchasing power for taxpayers.
Senior citizens age 65 and older continue receiving the traditional additional standard deduction of $2,050 for single filers and $2,050 for heads of household, with married filers receiving $1,650 per qualifying spouse in 2026. These amounts stack on top of the regular standard deduction. Additionally, eligible seniors can claim the separate $6,000 bonus deduction per qualifying taxpayer (up to $12,000 for married couples both age 65+) through 2028, subject to income phaseouts beginning at $75,000 (single) and $150,000 (married). A single senior age 65+ could potentially claim a total standard deduction of $24,150 ($16,100 + $2,050 + $6,000) if their income falls below the phaseout threshold. The combined effect of these deductions means a married couple both age 65+ with income below the phaseout limit could shield up to $47,900 from federal taxation ($32,200 + $3,300 + $12,000), a historically unprecedented level of tax-free income for senior households.
Child Tax Credit Statistics in the US 2025-2026
| Credit Component | 2025-2026 Amount | Income Phase-Out Begins | Eligibility Requirements |
|---|---|---|---|
| Maximum Child Tax Credit | $2,200 per child | $200,000 (single); $400,000 (married) | Child under 17; valid SSN required |
| Refundable Portion (ACTC) | $1,700 per child | Based on earned income | 15% of earnings over $2,500 |
| Phase-Out Rate | $50 per $1,000 over threshold | Complete phase-out varies | Reduces credit until eliminated |
| Total Families Benefiting | Over 40 million families | N/A | Must claim qualifying child |
| Trump Accounts (2025-2028) | $1,000 federal contribution | Must open by July 4, 2026 | US citizen child, parents have SSNs |
| Trump Account Annual Limit | $5,000 individual contribution | No income limits | Investment in US stock index funds |
| Employer Trump Contribution | $2,500 per year (tax-free) | Not counted as income | Contribution to employee/dependent account |
Data source: Internal Revenue Service, Joint Committee on Taxation, IRS Notices 2025-68, 2025-117
The Child Tax Credit (CTC) for 2025-2026 increased to $2,200 per qualifying child under age 17, representing a $200 increase from the previous $2,000 limit and the first expansion since the TCJA doubled the credit in 2017. This enhancement, made permanent and inflation-adjusted for future years, delivers substantial benefits to working families, with the Joint Committee on Taxation estimating benefits for over 40 million families annually. The refundable portion—officially the Additional Child Tax Credit (ACTC)—rises to $1,700 per child, calculated as 15% of earned income exceeding $2,500, allowing lower-income families without sufficient tax liability to receive cash refunds. The phase-out structure begins at $200,000 of modified adjusted gross income for single filers and $400,000 for married couples, reducing the credit by $50 for every $1,000 of income above these thresholds.
The groundbreaking Trump Account provision introduces a federal $1,000 contribution for each eligible child born between January 1, 2025, and December 31, 2028, who is a US citizen with parents holding Social Security numbers. Parents must establish these accounts by July 4, 2026, with funds invested in mutual funds or exchange-traded funds tracking US stock indexes like the S&P 500. Families can contribute up to $5,000 annually from personal funds, while employers can add up to $2,500 per year without it counting as taxable income for the employee. Funds remain invested until the child turns 18, at which point the account converts to traditional IRA status with similar tax rules. While the child tax credit enhancement benefits families immediately, the Trump Account creates long-term wealth accumulation, with the federal $1,000 contribution potentially growing to over $10,000 by age 18 assuming historical market returns. However, millions of low-income families remain excluded from the full child tax credit, with 17 million children in low-income households not receiving the complete $2,200 credit due to insufficient earned income.
State and Local Tax (SALT) Deduction Cap in the US 2025-2026
| Tax Year | SALT Deduction Cap | Income Phase-Out Begins | Complete Phase-Out |
|---|---|---|---|
| 2025 | $40,000 (single/joint); $20,000 (married separate) | $500,000 single; $250,000 separate | Gradual reduction over range |
| 2026 | $40,400 (inflation-adjusted) | $510,000 (approximate) | $75,000 phase-in range (single) |
| 2027-2029 | Inflation-adjusted annually | Rising with inflation | $150,000 phase-in range (married) |
| 2030 and beyond | $10,000 (reverts to TCJA cap) | No phase-out | N/A |
Data source: Internal Revenue Service, Tax Foundation, Congressional Budget Office, One Big Beautiful Bill Act
The state and local tax (SALT) deduction cap underwent dramatic expansion under the OBBBA, quadrupling from $10,000 to $40,000 for most filers ($20,000 for married filing separately) for tax years 2025 through 2029. This provision delivers significant relief to taxpayers in high-tax states like California, New York, New Jersey, Connecticut, and Illinois, where residents historically paid substantial state income taxes, property taxes, and local taxes that exceeded the restrictive $10,000 TCJA cap. For 2026, the cap increases to approximately $40,400 through inflation adjustments, with similar annual increases through 2029. The OBBBA modified the original House proposal’s phase-in mechanics, extending the income range over which the deduction limit phases down from $50,000 to $75,000 for single filers and from $100,000 to $150,000 for married couples.
The phase-out structure begins at $500,000 of modified adjusted gross income for single filers in 2025 (rising to approximately $510,000 in 2026) and $250,000 for married filing separately, ensuring the enhanced cap doesn’t disproportionately benefit ultra-high earners. As income rises through the phase-out range, the deduction cap gradually reduces but cannot fall below the original TCJA floor of $10,000. After 2029, unless Congress acts, the cap automatically reverts to $10,000 with no phase-out structure. The Institute on Taxation and Economic Policy estimates that repealing the SALT cap entirely would overwhelmingly benefit high-income households, with the top 1% receiving the largest average tax cuts. The temporary elevation through 2029 represents a political compromise, delivering substantial relief to affected states while maintaining fiscal constraints through phase-outs and sunset provisions. Taxpayers in high-tax states should maximize SALT deductions during 2025-2029 and plan for the potential reversion to $10,000 caps in 2030.
Tips and Overtime Income Deductions in the US 2025-2028
| Deduction Type | Maximum Annual Deduction | Eligible Occupations/Income | Requirements |
|---|---|---|---|
| Qualified Tips | $25,000 per taxpayer | Tipped service occupations | IRS-designated occupations only |
| Qualified Overtime | $12,500 (single); $25,000 (married joint) | Overtime compensation | Excess over 40 hours/week |
| Combined Benefit | Both deductions available | Tips + Overtime eligible | Must report for SS/Medicare |
| Effective Tax Years | 2025, 2026, 2027, 2028 | Sunsets December 31, 2028 | Must file Form 8903 |
Data source: Internal Revenue Service, IRS Notice 2025-69, IRS Fact Sheet 2025-03
The tips income deduction and overtime pay deduction represent innovative provisions creating substantial tax benefits for service workers and hourly employees from 2025 through 2028. Employees and self-employed individuals can deduct up to $25,000 of qualified tips received in IRS-designated tipped occupations, which include servers, bartenders, hair stylists, casino dealers, valets, bellhops, and similar service positions. This deduction applies to income tax calculations only—workers must still report all tips for Social Security and Medicare purposes, ensuring they don’t sacrifice retirement benefits for current tax savings. The IRS published comprehensive guidance in Notice 2025-69 specifying eligible occupations and documentation requirements.
The overtime pay deduction allows employees and self-employed individuals to deduct qualified overtime compensation up to $12,500 for single filers and $25,000 for married couples filing jointly. Qualified overtime includes compensation for hours worked exceeding 40 hours per week, calculated at time-and-a-half or higher rates. Importantly, taxpayers can claim both the tips deduction and overtime deduction in the same tax year, potentially deducting up to $37,500 (single) or $50,000 (married) of income from federal taxation. These provisions particularly benefit restaurant workers who earn both tips and overtime, potentially eliminating federal income tax liability entirely for many service industry employees. Treasury Secretary Bessent indicated these deductions align with President Trump’s commitment to working-class Americans, though critics note the temporary nature through 2028 creates uncertainty. Taxpayers must maintain documentation of tip income and overtime hours, filing the appropriate forms with their tax returns to claim these deductions.
Trump Tariff Dividend Checks and 2026 Initiatives
| Initiative | Announced Amount | Eligibility | Timeline | Status |
|---|---|---|---|---|
| Tariff Dividend Checks | $2,000 per person | Moderate/middle-income Americans | Mid-2026 (approx July-August) | Requires congressional approval |
| Income Limit (Preliminary) | Under $100,000 (families) | Working families | To be determined | Under discussion |
| Estimated Cost | $600 billion (if universal) | All eligible Americans | One-time payment | Exceeds tariff revenue |
| Tariff Collections FY 2026 | $37.5 billion (through Dec 2025) | N/A | Ongoing collection | Revenue insufficient alone |
| Medicaid Cuts | $1 trillion over 10 years | Affects 12 million people | Enacted in OBBBA | Funding OBBBA tax cuts |
| SNAP Benefit Cuts | $186 billion over decade | Nutrition assistance recipients | Enacted in OBBBA | Offsets tax cut costs |
Data source: White House announcements, U.S. Treasury Department, Congressional Budget Office, Fox News, Axios
President Donald Trump announced in November-December 2025 his intention to distribute $2,000 tariff dividend checks to middle-income Americans by mid-2026, funded by revenue generated from his administration’s tariff policies. Speaking in the Oval Office on November 17, 2025, Trump specified the checks would go to “individuals of moderate income, middle income,” with Treasury Secretary Scott Bessent suggesting an income threshold of approximately $100,000 for families on Fox News on November 12. The President stated, “We’re going to be issuing dividends later on, somewhere prior to probably the middle of next year, a little bit later than that,” placing the timeline around July-August 2026—conveniently before the midterm elections.
The fiscal arithmetic presents significant challenges to this proposal. The U.S. Treasury collected $37.5 billion in tariff revenue through December 2025 in fiscal year 2026, while the Committee for a Responsible Federal Budget estimates $2,000 checks for all Americans including children could cost $600 billion—vastly exceeding tariff collections. Even if limited to low and middle-income adults, the cost would exceed $200 billion, creating a net $400 billion fiscal deficit from this initiative alone. Bessent confirmed congressional legislation is required for the dividend checks, and passage remains uncertain given the massive cost. The Supreme Court is simultaneously reviewing the legality of Trump’s tariffs, with both conservative and liberal justices expressing skepticism during oral arguments. If the Court strikes down the tariffs, the administration may need to refund billions to importers, eliminating any revenue for dividend checks. The OBBBA already includes $1 trillion in Medicaid cuts potentially affecting 12 million people and $186 billion in SNAP benefit reductions over the next decade to partially offset tax cut costs, raising questions about funding additional $2,000 payments to households.
Distribution of Tax Cuts by Income Level in the US 2026
| Income Group | Share of Tax Cuts 2026 | Average Tax Cut Amount | Effective After Tariffs |
|---|---|---|---|
| Bottom 20% | Less than 1% | Minimal | Negative (tariffs cost more) |
| Bottom 40% | Combined 10% | Marginal | Negative (tariffs exceed benefit) |
| Middle 20% (Middle Class) | 10% | $1,000 approximate | Reduced by tariff costs |
| Top 20% | 70% of total cuts | $5,000+ average | Positive net benefit |
| Top 5% | 45% of total cuts | $15,000+ average | Strong positive benefit |
| Top 1% | $117 billion total | $78,000 average | $80,000+ (TCJA extension) |
| Bottom 60% Combined | $77 billion total | Varies widely | Offset by program cuts |
Data source: Institute on Taxation and Economic Policy (ITEP), Penn Wharton Budget Model, Tax Policy Center, Budget Lab at Yale University
The distribution of tax cuts under the OBBBA reveals stark disparities across income levels, with over 70% of the net tax cuts in 2026 flowing to the richest 20% of Americans. Analysis by the Institute on Taxation and Economic Policy (ITEP) shows the top 1% receives $117 billion in tax cuts in 2026 alone—52% more than the $77 billion going to the bottom 60% of households combined. The average tax cut for the top 1% reaches $78,000 to $80,000 annually, primarily from the extension of TCJA provisions including lower marginal rates, enhanced estate tax exemptions, and pass-through business deductions. In contrast, the poorest 20% of Americans receive less than 1% of total tax cuts, with benefits measured in hundreds rather than thousands of dollars.
The middle 20% of income earners—representing America’s traditional middle class—receive approximately 10% of total tax cuts, translating to around $1,000 in annual tax relief for the typical household. However, these gains are substantially eroded by Trump’s tariff policies and spending cuts embedded in the OBBBA.
Disclaimer: The data research report we present here is based on information found from various sources. We are not liable for any financial loss, errors, or damages of any kind that may result from the use of the information herein. We acknowledge that though we try to report accurately, we cannot verify the absolute facts of everything that has been represented.
