Stephen Moore: Show me the money — the Trump tax cuts benefit the middle class

Op-ed views and opinions expressed are solely those of the author.

Democrats keep attacking President Donald Trump’s One Big Beautiful Bill Act of 2025 as a tax cut for the rich. But the data show that the average family gained roughly $2,000 on their lower tax bill for this year. Every Democrat in Congress voted no, even as they complain of a “middle-class affordability crisis.” Maybe that’s because to rich and famous limousine liberal Democrats, $2,000 is peanuts. But not for the rest of us.

The goal of the Trump tax cut was simple: Strengthen the economy with lower tax rates, and let working and retired Americans keep more of what they earn. The early evidence confirms this is exactly what has happened. Initial IRS data show that almost half of filers have already taken advantage of the bill’s middle-income tax provisions.

Income taxes have become such an ingrained part of American life that many workers barely notice how much is snatched from their paychecks: payroll taxes, federal income taxes, state income taxes, etc. We see the net amount and forget that the gross amount is what we actually earned. Because less is now taken out, the Trump tax cut functions like a pay raise.

So, who is getting a pay raise from the OBBBA? Three major provisions were deliberately crafted to help working-class and middle-class Americans keep more of their hard-earned dollars.

First, the law eliminated income tax on tipped wages, subject to certain caps. For millions of waiters, waitresses, bartenders, baristas, barbers, hairstylists, DoorDash drivers, tour guides, casino dealers, and counter staff at casual restaurants, this means a substantial share of their income is no longer taxed. In some of these occupations, tips make up more than half of total earnings, so the impact is enormous. These workers may lead rich and fulfilling lives, but none of them qualify as Trump’s “rich friends.”

Second, the bill eliminated federal income tax on overtime pay, again with income limits. This provision frees hourly workers from being taxed when they put in extra hours. Put differently, eliminating tax on overtime reduces the number of hours each day that hourly workers are laboring not for themselves or their families but for the government. Given how many Americans are paid hourly, this provision overwhelmingly benefits people who are not wealthy.

Third, the tax bill reduces the tax rate you pay. This incentivizes more work because the reward for getting a job and working more hours is more money.

Through March 25, more than 85 million individual tax returns had been filed. Of those, 37.5 million — 44% — saw an immediate reduction in their tax bill.

The bill also created a forward-looking benefit for children: Trump Accounts. These accounts help young Americans begin investing early, giving them a head start on saving for education, starting a business, or building long-term financial security. Children born between Jan. 1, 2025, and Dec. 31, 2028, are eligible for a $1,000 federal contribution, and early tax data shows strong enthusiasm. Roughly 2.6 million returns established Trump Accounts for more than 4 million children, and nearly 1 million qualified for the federal contribution.

When we take account of all these tax benefits, what we find is that far from being “tax cuts for the rich,” the OBBBA’s tax provisions actually reduced the tax bill paid by the middle class by roughly 14%. Meanwhile, the share of federal income taxes paid by the richest 10% rose from 70% to 77%, and the top 1% share rose from 38% to 40%.

If the rich are now paying a larger share of the tax pie, how is the Trump tax cut “a giveaway to the rich”? Maybe the Left calls the Trump tax cut “One Big Ugly Tax Bill” because they want every one of us — not just the rich — to pay more taxes.

Stephen Moore is a former Trump senior economic adviser and the cofounder of Unleash Prosperity, which advocates for education freedom for all children.

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Stephen Moore

Stephen Moore is an economics journalist, author, and columnist who served as the senior economics writer for the Wall Street Journal editorial page and as member of the Journal's editorial board.