Who Really Got Rich from Trump’s Tax Cuts?

The Republicans’ celebration of President Donald Trump’s “big beautiful bill” as a boon for average Americans is belied by data showing that the tax breaks primarily benefited upper-middle-income to upper-income earners. The 2017 tax cuts, which were made permanent in part due to their popularity among this demographic, provided the majority of benefits.

According to Joseph Rosenberg, a senior fellow at the Urban-Brookings Tax Policy Center, “these tax provisions hit households differently.” While millions of Americans claimed new deductions such as tips, overtime earnings, and auto loan interest, the impact varied greatly depending on individual circumstances. The average tips deduction exceeded $7,000, and senior deductions topped over $7,500, as reported by Treasury data.

However, these deductions reduce taxable income, which means that lower-earners are less likely to benefit from them since they may not owe taxes. Furthermore, the significant increase in the SALT (State and Local Taxes) deduction limit from $10,000 to $40,000 for 2025 will disproportionately benefit upper-income earners. According to Garrett Watson of the Tax Foundation, “the bigger SALT deduction is most beneficial to upper-middle-income to upper-income earners because it starts to phase out at $500,000.”

The IRS data on tax refunds suggests that the average refund size increased by 11.5% for individual returns in the 2026 filing season. However, this metric is far from a definitive measure of how Americans fared under the new tax laws. Tax refunds or balances due can fluctuate greatly based on paycheck withholdings, earnings changes, and other factors.

As the midterm elections approach, some policy experts worry that it’s difficult to predict whether Trump’s tax breaks will sway voters at the ballot box. A Politico poll found that nearly half of Americans say they can’t explain the One Big Beautiful Bill Act. This lack of understanding is not surprising given how convoluted these tax laws are.

In fact, if Trump’s tax breaks primarily benefit upper-middle-income to upper-income earners, it raises questions about whether this will translate into tangible benefits for lower-earners in the long run or perpetuate a widening wealth gap. The real challenge lies in translating these complex tax laws into meaningful benefits for all Americans – rather than just those who stand to gain the most.

The complexity of these tax laws and their disparate impact on different income groups underscores the need for greater transparency and clarity in policy-making. As such, it’s crucial that policymakers take a closer look at how these tax breaks are working in practice and make adjustments as necessary to ensure that all Americans benefit from them – not just those who stand to gain the most.