Trump's tax law benefits higher earners while some workers see smaller gains

The tax changes increased average refunds this season and the White House has promoted gains for tips, overtime and Social Security; analyses project about 60% of the law’s tax savings will go to the top fifth of households, while some workers face caps or exclusions.

President Trump's tax law, passed last year, is being promoted by the White House as cutting taxes on tips, overtime and Social Security. The IRS reported a higher average refund this season, and the administration says the extra cash will boost the economy. At the same time, interviews and analyses show some middle-income and tip-dependent workers are receiving smaller gains than expected because of caps and exclusions. Independent analyses and experts indicate much of the dollar value of the tax savings goes to higher-income households. Key facts: - The IRS reported an average refund of $3,521 this season, about $350 more than last year (data as of March 27). - The White House has highlighted provisions described as "no tax on tips, no tax on overtime, no tax on Social Security." - The Tax Policy Center projects roughly 60% of the law’s tax savings will go to the top fifth of households by income. - Certain groups and limits affect who benefits: overtime savings exclude some railroad and truck workers, the tips deduction is capped at $25,000, and the Social Security deduction excludes very low and higher earners. Summary: The law has raised average refunds for many households while analyses show a disproportionate share of the dollar benefits flowing to higher-income households. Researchers cited Federal Reserve data noting faster wealth gains for the top 1% in 2025, which analysts say is part of the broader context. Undetermined at this time.