Did tax changes under Trump’s second presidency benefit lower- and middle-income workers?
Executive summary
The One Big Beautiful Bill preserved and expanded elements of the 2017 Tax Cuts and Jobs Act — raising the standard deduction and extending lower tax brackets while adding some family-oriented credits — measures that produced direct tax relief for many lower‑ and middle‑income households in 2026; however, independent distributional analyses and policy groups conclude the lion’s share of net tax cuts flowed to the wealthy, and financing or secondary effects of the law could harm lower‑income families [1] [2] [3] [4].
1. What the law actually changed, in plain terms
The legislation made permanent lower individual and business rates from the 2017 TCJA, kept the seven tax brackets and lower marginal rates in place, increased the standard deduction (to roughly $15,750 for singles and $31,500 for joint filers in 2025 figures), and added or extended family‑focused provisions such as a doubled child credit and new newborn payments — changes the White House and congressional Republicans framed as direct relief for working families [1] [2] [5].
2. Immediate relief: who clearly benefited on their tax forms
Millions of taxpayers who take the standard deduction saw larger immediate reductions in taxable income thanks to the higher standard deduction, and families claiming the child tax credit or the newborn payment gained clear dollar benefits on returns — outcomes emphasized by proponents and tracked by tax‑service guidance and the Tax Policy Center’s tracker [2] [3] [5].
3. The distributional picture: big gains concentrate at the top
Non‑partisan and progressive analysts find an uneven distribution: ITEP estimated over 70% of net tax cuts in 2026 went to the richest fifth of Americans while less than 1% went to the poorest fifth, and prior analyses of the 2017 TCJA showed the top 1% would receive vastly larger average cuts than the bottom 60% — evidence that, in net terms, the law disproportionately benefits high‑income households [4] [6].
4. Why middle‑class headlines clash with academic tallies
Political messaging from Ways and Means and Senate Finance framed the bill as sparing middle‑income families from tax hikes and delivering “historic relief” — and some IRS and administration figures predicted broad middle‑class boosts — but distributional analyses by independent groups and the Joint Committee on Taxation show that while many middle‑income households receive modest cuts, the largest dollar amounts and some new provisions (SALT cap relief, pass‑through benefits) skew heavily toward higher earners [5] [7] [8] [9] [10].
5. Business and technical provisions that lift the well‑off more than workers
The law extended or expanded business‑oriented breaks — including a 20% pass‑through deduction and loosened SALT limits for higher earners — which provide substantial tax savings to small business owners, investors and high earners in high‑tax states, mechanisms that raise average benefits at the top even if headline standard‑deduction changes help many middle earners [1] [9].
6. The financing question and risks to low‑income workers
Analysts warn that the law’s long‑run fiscal cost — billions added to the deficit — means financing could come through cuts to means‑tested programs like SNAP or Medicaid or via slower growth; both outcomes would disproportionately harm low‑income families and undo some of the modest direct gains they received on tax forms [11] [4].
7. Bottom line: modest direct help, but unequal net benefits
Lower‑ and many middle‑income workers did receive concrete tax relief from preserved TCJA features (higher standard deduction, child credits, lower rates on ordinary income), but independent distributional studies and policy analysts concur that the net benefits of the 2025 package accrue far more to higher‑income households and business owners, and offsetting fiscal pressures create material downside risks for low‑income families [2] [3] [4] [6] [11].