As President Trump seeks to advance his tax and domestic policy bill, he and his allies have claimed that the legislation will benefit seniors and the middle class.
The Senate passed its version of the bill narrowly on Tuesday, with Vice President JD Vance casting a tiebreaking vote. Both chambers of Congress will now work to reconcile the differences between their respective versions.
However, some of the frequently cited assertions—such as warnings of significant tax increases if the bill does not pass, claims of eliminating taxes on Social Security, and assertions of record tax cuts for average Americans—have been found to be inaccurate.
During a news conference, President Trump stated, “If it’s not approved, your taxes will go up by 68 percent.” This claim has been deemed false. According to the Tax Policy Center, a nonpartisan think tank, if the 2017 tax cuts were to expire, most taxpayers would experience a modest tax increase, averaging around 7.5 percent or approximately $2,100, significantly less than the 68 percent cited by Trump.
Further estimates from the Tax Foundation suggest an average tax increase of about $2,800 if the cuts expire, while the Brookings Institution found an average increase of $1,900. Trump may have misinterpreted a statistic indicating that about two-thirds of taxpayers would see an increase in taxes if the 2017 law were to lapse.
In an interview on Fox Business Network, Trump claimed, “There’s also no tax on tips, no tax on Social Security, no tax on overtime.” This statement has been characterized as exaggerated. The bill does introduce temporary deductions for tips and overtime, but these benefits are limited. The Senate bill allows workers to deduct tips and overtime pay from 2025 to 2028, with caps on the deductions based on income levels.
Under current law, up to 85 percent of Social Security benefits are taxable for seniors with incomes exceeding $25,000. The Senate bill proposes an additional deduction of $6,000 for seniors, which phases out at higher income levels and is set to expire in 2028. This does not equate to the complete elimination of taxes on benefits.
The House bill proposes a $4,000 deduction, which is estimated to cost $66 billion from 2025 to 2028. In contrast, fully eliminating taxation on Social Security would incur a cost exceeding $1.4 trillion over a decade. Analyses indicate that the additional deduction would primarily benefit higher-income individuals.
Regarding claims of the bill representing the largest tax cut for middle-class Americans in history, this assertion has also been found to be false. Recent legislation has provided larger tax benefits to the middle class. The Tax Policy Center's analysis indicates that the Senate bill would result in an average tax cut of 1.9 percent, or about $1,750, for the middle quintile of taxpayers.
In comparison, a 2021 coronavirus stimulus package resulted in a 6 percent tax cut, or $3,700, for the middle quintile, while tax cuts from 2012 provided a reduction of about 2.3 percent, or nearly $1,200. Historical data shows that the 1981 tax cut provided an 11 percent reduction for a median family income of $20,000.
Additionally, both the Senate and House bills contain provisions that may negatively impact the middle class. The Congressional Budget Office's analysis of the House bill suggests that while certain households may see tax cuts, they could also experience reductions in state and federal benefits.