Although President Donald Trump is promising Americans a “big tax refund” next year, regular employees relying on W-2 wages won’t see much benefit from the new tax reforms. According to economic experts and recent data, the impact on middle-income earners is minimal — and for many, nearly negligible.

Working-Class Gains Are Marginal, Wealthy Benefit Most

Adam Michel from the libertarian Cato Institute points out that “a typical W-2 worker without children will see very little year-over-year change.” And these workers make up the majority of taxpayers in the U.S. — more than half. That sharply contrasts with the promises from the White House.

While Trump continues to claim his policies will improve affordability, reality paints a different picture. Consumer sentiment is near historic lows, confidence in personal finances is at its worst since 2009, and the job market is cooling off. Many Americans are feeling the economic pressure more than ever.

Wealthy States Like California and New York Reap the Rewards

The greatest tax breaks are flowing to high-income households. Those earning more than $376,000 annually will see their tax burden reduced by an average of $2,585, according to the Penn Wharton Budget Model. Meanwhile, households making between $49,000 and $90,000 will gain just $650 post-tax.

More granular data reveals the imbalance:

🔹 Around 25% of taxpayers will receive a higher child tax credit (up to $200 per child)

🔹 13% can claim a new senior deduction for those over 65

🔹 12% will qualify for deductions on tips, overtime, or auto loan interest

But for the average household, the benefit is modest and won’t offset rising prices or inflation.

New Deduction Caps Help Only the Few

One major change is the new $40,000 cap on state and local tax (SALT) deductions — a fourfold increase from the previous $10,000 limit. However, this change primarily benefits the ultra-wealthy, especially in states like California, New York, and New Jersey.

Andrew Lautz from the Bipartisan Policy Center confirms that most taxpayers will save only a few hundred dollars due to the higher standard deduction. In contrast, those who qualify for the new specialized deductions will see significantly larger refunds.

Refunds May Rise — But the Average is Misleading

White House Press Secretary Karoline Leavitt recently claimed that “refunds could be about a third higher than usual.” But experts warn that this statement is misleading — averages are skewed by a small group of high-income filers.

Moreover, employees won’t see these savings in their paychecks throughout the year. The IRS left outdated withholding tables in place, so no tax savings were reflected in monthly income. As a result, any benefits will arrive as a lump sum during tax season.

A Political Move Before the Election?

The timing of the tax reform suggests a calculated political strategy. Delivering a larger refund just months before midterm elections could leave voters with a favorable impression — even if their overall financial reality hasn’t changed.

According to Brendan Novak of the Penn Wharton Budget Model, the structure of the tax bill is designed to benefit higher earners. The $3.4 trillion in cuts are built on deductions rather than credits, which gives the greatest advantage to those who pay the most taxes.

#TRUMP , #USPolitics , #USGovernment , #economy , #usa

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