Trump’s Tax Cuts Will Save Average Households Thousands Per Year: Report
The White House is touting a new economic analysis that estimates taxpayers will see an average $3,752 tax cut in 2026 due to provisions in the One Big Beautiful Bill Act.
According to the nonpartisan Tax Foundation report, taxpayers in every state will see reduced federal taxes next year, though there is “considerable geographic variation” in tax benefits, Just The News reported.
“President Trump’s One Big Beautiful Bill is the largest, most consequential tax cut on the middle class ever,” White House Deputy Press Secretary Anna Kelly said Friday. “Between lower inflation, massive investments, and historic tax cuts, all Americans are reaping the benefits of the Trump Economy – and the Golden Age has just begun.”
Republicans’ multitrillion-dollar OBBBA made permanent the expiring 2017 Tax Cuts and Jobs Act’s across-the-board reduced tax rates, the $15,000 standard deduction, the $2,000 Child Tax Credit, the 20 percent QBI deduction for small businesses, and the $750,000 home mortgage interest deduction cap.
Three key business tax credits were also made permanent: full reimbursement for new capital investments like machinery and equipment, an expanded deduction for corporations’ interest on debt, and immediate deductions for companies’ research costs.
The OBBBA also implemented a host of temporary tax provisions set to expire in 2030, including a quadrupling of the $10,000 state and local tax deduction cap, a $6,000 deduction for seniors, and temporary tax deductions for tips and overtime pay, capped for single filers at $25,000 and $12,500, respectively.
Taken together, the Tax Foundation analysis estimates the OBBBA’s tax provisions will lower individuals’ taxes in every state and create 938,000 full-time jobs in the long run.
Individuals in Wyoming, Washington, and Massachusetts will see the largest average tax cuts in 2026, hovering around $5,100.
Residents of West Virginia and Mississippi will see the smallest average tax cuts that year, around $2,400.
On a more local level, taxpayers in mountain resort towns will receive the highest average tax benefits, while taxpayers in rural counties will receive the lowest benefits.
Once the temporary tax provisions expire, the average tax cut will fall to $2,505 in 2030, then climb to $3,301 by 2035 due to inflation.
Although individual households will benefit from the tax cuts, the country’s fiscal health likely will not, according to budget watchdogs like the Congressional Budget Office.
The CBO estimates the trillions in lost federal revenue will add an extra $4.1 trillion to the national debt by 2034.
In March, Commerce Secretary Howard Lutnick said that President Donald Trump informed him that he wants to eliminate income tax for anyone making less than $150,000 annually.
“I’m in the car with him, and I said we’re going to balance the budget,’” the secretary said on the “All In” podcast last week, Just The News reported.
“And I said, ‘But I have one favor to ask you: If we can balance the budget for you, will you agree to waive all income tax for every person who makes less than $150k a year in the United States of America?’ Which, by the way, is about 85% of Americans,” Lutnick continued.
“And the reason you want to work for Donald Trump is he looks at me, he goes, ‘Sure,’” he said. “You realize, the President of the United States said, ‘If you balance the budget, sure.’ And he’s not lying; he’s not kidding. He’s like, ‘Yeah.’”
The United States did not have an income tax until 1913 after the ratification of the 16th Amendment, funding the government mainly via tariffs. Trump has said he would like to get back to a tariff-based funding system.
“America is going to be very rich again, and it’s going to happen very quickly.” The president said during his campaign to Republicans gathered at his Florida resort.
“It’s time for the United States to return to the system that made us richer and more powerful than ever before,” he said.
