Trump Policies to Cost Middle-Income Americans $1,700 Extra in 2026, Think Tank Finds

The findings

A typical middle-income American will pay about $1,700 more in taxes and other costs in 2026 because of policies enacted under President Donald Trump’s second administration, according to a new analysis from the Institute on Taxation and Economic Policy. The poorest 20 percent of earners will pay about $750 more. Only the wealthiest 1 percent will pay less, by about $12,560, the report says.

The institute, described by USA Today as a left-leaning think tank, released the report on Oct. 8. It examines three sets of policy changes: new tax provisions in the One Big Beautiful Bill Act, the expiration of Affordable Care Act tax credits first passed during the COVID-19 era, and price increases tied to tariffs, the Iran war, and immigration enforcement.

Those added costs, the report says, may help explain why consumer confidence stands near an all-time low and household debt is rising, even as other measures of the economy look strong.

Where the costs land

For a middle-income household, the report estimates the One Big Beautiful Bill Act provides about $380 in new tax savings in 2026, with another $780 from tax cuts already in effect. But other policies cancel that out and more: price increases from tariffs, immigration actions, and the Iran war are estimated to cost the same household about $1,850, and the expiration of the health care tax credits adds another $230.

“No matter how much the Trump administration touts the tax cuts that they’ve enacted, they can’t get around the fact that they’ve caused increased costs that more than offset those tax cuts by a lot for most people, except for the rich,” said Steve Wamhoff, the institute’s federal tax policy director.

For the top 1 percent, the math runs the other way. The report estimates Trump’s inflationary policies will cost the wealthiest households an extra $15,990 in 2026, but new tax cuts will save them $28,550, leaving them ahead by $12,560.

The report’s authors compared actual price increases under the second Trump administration with inflation projections the Congressional Budget Office made when Trump reclaimed the presidency.

The pushback

The White House disputes the analysis. White House spokesman Matthew Middleton said in a statement that Trump’s “aggressive, pro-growth economic agenda has stopped Biden’s inflation crisis, driven economic growth, and created private-sector jobs, and will continue to deliver economic wins over the next two years.”

Other policy analysts raised questions about the report’s methods. Kyle Pomerleau, a senior fellow at the libertarian American Enterprise Institute, said giving the administration credit for extending the 2017 tax cuts changes the picture: “Without that action, taxes would have gone up.” The report only counts tax policies enacted in 2025, not the extension of cuts already in effect.

Adam Michel, director of tax policy studies at the libertarian Cato Institute, said the COVID-era health care credits were “meant to be temporary” and that Democrats could have made them permanent when they controlled the White House. Michel also said “tariffs are tax increases on Americans,” calling the claim that trade policies made life more expensive a fair one.

The Congressional Budget Office and the Peter G. Peterson Foundation have also found that the tax cuts in the One Big Beautiful Bill Act favor high-income households, according to USA Today.

Reporting based on coverage by USA Today.