WASHINGTON, D.C. – The working families tax cuts provides the largest benefit to middle-income Americans, finds a study from the Tax Foundation. The middle 60 percent of earners will see the largest changes in after-tax income for 2025 and 2026, while the top 20 percent will pay a greater share of the income tax burden. 

“The working families tax cuts prioritize the working men and women who keep this country running and thriving. For years, families were crushed by the high cost of living created by the failed economic policies of the Biden Administration which rewarded the wealthy and well-connected. Republican policies are tailor-made to put more money back in the pockets of working families – including, a larger Child Tax Credit, no tax on tips, no tax on overtime, no tax on Social Security, as well as more help with child care, health care, and education expenses” said Ways and Means Committee Chairman Jason Smith (MO-08). “Just like we did with the 2017 Trump tax cuts, Republicans took more of the tax burden off the shoulders of hard-working Americans. Republicans are truly the party of the working class, waitresses, welders, seniors, and parents.”

Study Highlights

• Top 20 percent pay more of the tax burden: The top 20 percent of earners will pay an increased share of all federal income taxes in 2026, just like they did after the 2017 tax law.
• Working families tax cuts give the most to the middle: After-tax income increases the most for the middle 60 percent of income earners in 2025 and 2026.
• Second time Republicans made the tax code fairer: The 2017 Trump tax cuts made the tax code more progressive. The working families tax cut made those tax cuts permanent. 
• Economic growth helps all Americans: Economic growth sparked by pro-growth tax policy in the working families tax cuts boosts incomes for all levels. 
• After-tax income rises for all Americans: After-tax income increases for all income levels for an average of 2.9 percent and 5.4 percent in 2025 and 2026, respectively. A separate Tax Foundation study found that Democrats’ signature tax law, the so-called Inflation Reduction Act, had the opposite effect and shrank incomes for every income level in the long-run.

Other distributional analyses of tax relief enacted by Republicans have produced similar conclusions: working families tax cuts favor middle-income earners. A left-leaning think tank found that the top 1 percent of earners will pay a higher share of federal income taxes while the lowest 20 percent of earners will get the largest reduction in taxes of any income group.

READ: Left-Leaning Think Tank Shows Working Families Tax Cuts Make Tax Code More Progressive

Read more about how the working families tax cuts delivers the biggest tax relief to the working class while increasing those paid by the wealthiest.