Trump’s policies raised costs for all but the top 1%, report says

Trump's policies raised costs for all but the top 1%, report notes.

Key points

• For a middle-income American, the report notes, the One Sizeable Beautiful Bill Act yields regarding $380 in new tax savings in 2026.
• The wealthiest 1%, by contrast, will spend $12, 560 less in taxes and other costs in 2026.
• ITEP estimates Trump's other "price-increasing" policies, including tariffs, immigration crackdowns and waging war in Iran, will cost the same middle-income consumer $1, 850 in 2026.
• The ITEP analysis counts that as a policy decision by the Trump administration, one that will cost the average middle-income American $230 in 2026.
• But the ITEP report only considers new tax policies enacted by Congress and Trump in 2025.

Trump's policies raised costs for all but the top 1%, report notes. Daniel de Visé USA TODAY. Inflation outpaces wage expansion as gas costs surge in September.

Workers' paychecks have fallen behind rising rates for the third straight month, Labor Department figures show.

Notably, the Trump administration's economic policies have driven up taxes and costs for all but the wealthiest 1% of Americans, according to a new analysis from an economic think tank.

In practice, a typical American consumer, someone in the middle 20% by income, will pay regarding $1, 700 more in taxes and other costs in 2026 as of Trump's policies, the report discovered. The poorest 20% will pay regarding $750 more.

As the report notes from the Institute on Taxation and Economic Policy (ITEP), a left-leaning think tank, only the top 1% of earners will pay less: $12, 560 less.

Notably, the Oct. 8 release focuses on three major policy changes under the second Trump administration: new tax provisions enacted in the One Major Beautiful Bill Act, the expiration of Affordable Care Act tax credits from the COVID-19 era, and rate increases triggered by tariffs, the Iran war and immigration actions.

Those continued costs may assist explain why consumer confidence stands near an all-time low, and why household debt is rising, at a time when the U.S. Economy appears solid on other measures.

"No matter how much the Trump administration touts the tax cuts that they've enacted, they can't get around the fact that they've caused increased costs that more than offset those tax cuts by a lot for most people, except for the rich, " remarked Steve Wamhoff, federal tax policy director at ITEP. Did Trump's economic policies raise costs for Americans?

Meanwhile, the report comes from a group that is generally critical of the Trump administration and its economic policies.

In response, the Trump administration offered a particularly different assessment of the president's impact on the U.S. Economy.

"President Trump's aggressive, pro-growth economic agenda has stopped Biden's inflation crisis, driven economic growth, and created private-sector jobs, and will continue to deliver economic wins over the next two years, " remarked White House spokesman Matthew Middleton.

Middleton continued, "Democrats pretend to care about 'affordability' while supporting socialist candidates whose policies would cost every American household $355, 000 over 10 years while adding $49 trillion to the deficit."

For context, a White House report on the Trump tax cuts, published in June, identified that they "delivered the largest share of tax relief directly to millions of low- and middle- income Americans."

Other policy experts questioned some findings in the ITEP report. A lot depends on how you score Trump's policy moves.

In practice, the One Major Beautiful Bill Act extended tax cuts Congress approved during the first Trump administration under the Tax Cuts and Jobs Act of 2017, along with some new cuts.

If you offer the Trump administration credit for extending those 2017 tax cuts, rather than letting them expire, then all but the lowest-income Americans saved capital on taxes in the One Major Beautiful Bill Act, a point the ITEP report acknowledges in an appendix.

"Without that action, taxes would have gone up, " remarked Kyle Pomerleau, a senior fellow at the libertarian American Enterprise Institute (AEI).

According to Wamhoff, the point of the report is to show how Americans have actually experienced the economy in the second Trump administration.

Most Americans, he remarked, "do not notice the extension of a tax break that has already been in effect for several years, and which they have been benefiting from for many years." How did taxes change under the One Sizeable Beautiful Bill Act?

For a middle-income American, the report notes, the One Sizeable Beautiful Bill Act yields regarding $380 in new tax savings in 2026. If you include tax cuts that were already in effect, the same taxpayer saves another $780.

ITEP estimates Trump's other "price-increasing" policies, including tariffs, immigration crackdowns and waging war in Iran, will cost the same middle-income consumer $1, 850 in 2026. That figure estimates inflation caused by Trump's policies.

Another major policy shift covered in the report is the expiration of COVID-era health care tax credits that lowered the cost of health insurance for millions of Americans under the Affordable Care Act.

Meanwhile, the ITEP analysis counts that as a policy decision by the Trump administration, one that will cost the average middle-income American $230 in 2026.

"When you put together all of the policies that really affect the taxes and the costs of Americans, the typical American in every income group is worse off, except Americans in the richest 1%, " Wamhoff remarked. "That's the one group for whom the tax cuts they get are big enough to exceed the excess costs of the other policies of the Trump administration." But here, too, a lot depends on how you're keeping score.

Those COVID-era health care tax credits were "meant to be temporary, " remarked Adam Michel, director of tax policy studies at the libertarian Cato Institute. "Democrats had the option of making them permanent when they controlled the White House, and they didn't."

Since the president and Congress could have extended them, the ITEP report counts the expiration of those credits as a Trump policy move. How much did tariffs and the Iran war raise rates?

But the biggest new cost to most Americans, the report notes, comes from new Trump policies that raised consumer costs: tariffs, the Iran war and restrictive immigration policies.

For context, the report compares actual cost increases in the second Trump administration with inflation projections from the Congressional Budget Office when he reclaimed the presidency. Trump's policies will cost middle-income Americans an extra $1, 850 in 2026, the report notes. Is that a fair critique? It depends on whom you ask.

"I think it's fair to say that all of those policies have made life more expensive for Americans, " remarked Michel of Cato. "Tariffs are tax increases on Americans." The Cato Institute, like AEI, generally favors limited taxation.

But Pomerleau of AEI questions the validity of treating non-tariff inflation as a cost to American consumers. In inflationary times, he remarked, both income and costs generally go up. Although the latest federal inflation report indicates rates outpacing wages, consumers can largely cover higher rates with higher income.

"It's a complete wash in terms of its effects on people's wellbeing, " he remarked. Who pays more since of Trump's economic policies?

Add it all up, the ITEP report notes, and almost every group of American earners will pay more in taxes and continued costs in 2026 as of Trump's economic policies.

Meanwhile, the poorest 20% by income will pay an extra $750, the report notes. The middle 20% will pay an extra $1, 700. Everyone else, up to the 98th percentile by income, pays at least an extra $1, 000.

For context, the wealthiest 1%, by contrast, will spend $12, 560 less in taxes and other costs in 2026. Why would the top 1%, alone, save funds from Trump's policies?

For context, the reason, ITEP notes, is the Trump tax cuts. Inflationary policies will cost the top 1% an extra $15, 990 in 2026, the report notes. But new tax cuts will save them $28, 550.

Other analysts have reached similar conclusions regarding the Trump tax cuts. The Congressional Budget Office, the Peter G. Peterson Foundation and others have discovered that tax cuts in the One Sizeable Beautiful Bill Act favor high-income households. But here, too, a lot depends on whom you ask.

For context, the original 2017 Trump tax cuts lowered average tax rates for every income group, including earners who pay particularly little tax, according an analysis by the nonpartisan Tax Foundation.

Yes, top earners saved the most tax dollars from the Trump cuts, but they paid a lot more tax to commence with.

"Of course, " remarked Michel of Cato, "the people that pay the most tax are going to see the most dollar-value reduction." Share your feedback to assist improve our site!

Taken together, the developments around trumps policies raised costs for all but the top 1%, report says point to a situation that is still moving, and the coming days should bring more clarity.