As lawmakers in Congress debate whether to renew the personal income tax cuts established by the Tax Cuts and Jobs Act, a familiar criticism has resurfaced: that President Trump’s signature legislative victory during his first term unfairly favored the rich while leaving the middle class behind.
These accusations frequently focus on the law’s corporate tax elements — particularly the permanent reductions in business tax rates. However, this narrow focus ignores the broader design, tangible outcomes and overall impact of the law’s changes to individual income taxes.
Critics of the Trump tax cut sometimes point to the law’s corporate tax reductions as proof that the legislation benefitted the wealthy. The tax reform law slashed the corporate tax rate from 35 percent to 21 percent. But that element represents only one piece of the legislation — and not the one that had the most direct consequences for everyday Americans.
The lion’s share of tax relief aimed at households came through reforms to individual income taxes, and those reforms were anything but lopsided in favor of the wealthy. On the contrary, as we revealed in a new study we co-authored for The Heartland Institute, IRS data conclusively shows that the individual tax cut provisions in Trump’s tax cuts disproportionately benefited the working and middle classes. In fact, IRS data shows the Trump tax cuts made the federal tax code more progressive — the exact opposite of what many of its critics allege.
A progressive tax code is one in which top earners pay higher tax rates and bear a larger share of the overall tax burden. Contrary to the claims of its critics, the Tax Cuts and Jobs Act both preserved and strengthened that structure, while simultaneously lowering marginal tax rates for every income bracket. It also included several provisions that were particularly impactful for low- and middle-income households, such as substantially increasing the standard deduction while doubling and enhancing the child tax credit.
The reforms delivered real savings for working- and middle-class Americans. Our study, which compared available IRS data from 2017 against each subsequent year after which the new tax law became effective, shows that every income bracket enjoyed a reduction in federal income taxes. However, the relative benefit was greatest for working- and middle-income Americans.
For example, the average filer earning “$40,000 under $50,000” paid 18.9 percent less in income taxes in 2022 compared to 2017. (2022 is the most recent year for which data are available.) Those earning “$50,000 under $75,000” paid 16.6 percent less, and earners in the “$75,000 under $100,000” bracket paid 10.93 percent less.
On the other end of the spectrum, the average filer earning “$1,000,000 under $1,500,000” paid 5.31 percent less in 2022 compared to 2017, and each of the four higher-income brackets experienced an even lower reduction. For instance, the tax bills for those earning “$5,000,000 under $10,000,000” were reduced by an average of 2.3 percent, which is nearly six times less than the reduction enjoyed by many lower- and middle-income filers.
These percentage changes reflect a core truth about the Tax Cuts and Jobs Act: While everyone’s taxes were reduced on average as a result of the tax law, the savings were far more significant for lower-and middle-income earners, when measured as a share of income rather than in absolute dollars. And that relative relief wasn’t just a one-year blip; the same theme is reflected in all other years for which IRS data are available too.
Equally compelling evidence comes from our analysis of how the overall federal tax burden shifted in the wake of the law’s passage. In 2022, every income bracket earning less than $200,000 paid a smaller share of the federal income tax burden than it had in 2017.
For example, filers earning “$100,000 under $200,000” saw their share decrease from 21.24 percent of the total income tax burden to 18.59 percent, and filers earning “$50,000 under $75,000” paid only 4.68 percent of the federal income tax burden in 2022, compared to 6.58 percent in 2017.
Meanwhile, each of the seven income brackets containing filers earning $200,000 or more paid a greater share of the total income tax burden. Filers earning “$200,000 under $500,000” saw their share increase from 21.2 percent to 22.6 percent, and filers earning more than $10,000,000 paid 12.44 percent of the federal income tax burden in 2022, compared to just 10.06 percent in 2017.
In total, the tax burden shifted upward, with higher-income earners carrying more of the load after the Trump tax cut went into effect, making it a progressive tax law by definition.
Despite clear evidence to the contrary, some critics continue to claim the Trump tax cuts benefited only “the rich” and was paid for at the expense of the middle class. That narrative, while politically potent, conflates corporate and individual provisions and ignores the available data from the IRS.
The Tax Cuts and Jobs Act created thousands of dollars in savings for each working-class American, helping millions of families meet everyday expenses such as groceries, gas, rent and debt payments. With the individual tax provisions set to expire at the end of 2025, these gains are now in jeopardy.
Ironically, if the individual tax cut provisions are allowed to expire, “the rich” will receive a large tax cut, because the law’s corporate tax reductions are already permanent and thus will not expire along with the individual tax cuts. Permitting the individual tax cuts to expire will mean the biggest winners will be large corporations, not individuals.
Congress must not allow the individual income tax cut provisions from 2017 to lapse. If they do, average tax bills for working- and middle-income Americans will increase significantly.
Jack McPherrin is a research fellow at The Heartland Institute. Justin Haskins is a Heartland Institute senior fellow and a New York Times bestselling author.
