Who gains, who loses? Trump’s tariffs and tax cuts break down the numbers

Trump economic policies winners and losers: US president Donald Trump’s first year in office has reshaped Americans’ finances, but the effects are far from equal.

Tax Cuts Mostly Favor the Wealthy

A new analysis from the Institute on Taxation and Economic Policy (ITEP) shows that the wealthiest Americans are reaping the biggest rewards, while many middle- and lower-income households are feeling the squeeze, as per a report.

Tariffs Hit Lower- and Middle-Income Families Hardest

The richest 1%, earning over $916,900, will see an average tax cut of $8,850 in 2026, as reported by Investopedia. Meanwhile, households making between $92,100 and $153,600 could pay an extra $980. For the bottom 20% of earners, who make less than $30,700, overall taxes as a share of income may rise by 3.1%. According to ITEP, only households earning above $361,000 begin to see meaningful net gains.

How Tariffs Affect Household Spending

Tariffs are adding pressure to everyday spending. The new 15% tariffs, currently set for 150 days, could cost households $600 to $800.

Martha Gimbel, cofounder of the Yale Budget Lab, explained that, those with higher income "spend more money on services, dog walkers, tutors, things like that. And so mechanically, something that increases the price of goods is just going to hit lower-income consumers harder than higher-income consumers," as quoted by Investopedia.

OBBBA Cuts: Medicaid and SNAP Impact Explained

Even when tax breaks like the Senior Tax Deduction or No Tax on Tips help lower-income households, other provisions in the One Big Beautiful Bill Act (OBBBA), including cuts to Medicaid and SNAP, could outweigh those short-term gains. Combining tariffs and OBBBA, most Americans end up worse off, with only the top 10% seeing consistent benefits.

Gimbel said, "There's not just tax provisions in the One Big Beautiful Bill Act," adding, "There are also spending provisions. Low-income consumers may also be losing their Medicaid. They may be losing their SNAP benefits. When you combine the effects of the One Big Beautiful Bill Act and tariffs, everyone is worse off until you hit the top" 10% of income, as quoted by Investopedia.

FAQs

Who benefits most from Trump’s tax cuts?
The richest 1% of Americans, earning over $916,900, get the biggest tax breaks, averaging $8,850 in 2026.

Do middle-income households gain anything?
Middle-income households, earning between $92,100 and $153,600, may actually pay more, around $980 extra.