As President Trump sought to pass his tax and domestic policy bill, he and his allies have insisted that the legislation would be a boon for seniors and the middle class.
The Senate narrowly passed its version on Tuesday, with Vice President JD Vance casting a tiebreaking vote. Now, both chambers of Congress will reconcile differences between their versions.
Still, some of their most repeated talking points — a warning about vast tax increases if the bill did not pass, a purported elimination of taxes on Social Security and boasts about a record tax cut for average Americans — are not accurate.
Here’s a fact-check.
What Was Said
“If it’s not approved, your taxes will go up by 68 percent.”
— Mr. Trump at a news conference on Friday
False. If the 2017 tax cuts expired, most taxpayers would see a modest increase in taxes, but nowhere near the 68 percent Mr. Trump cited.
The Tax Policy Center, a nonpartisan think tank, estimated that not extending the tax cuts would lead taxes to increase by 7.5 percent on average, or about $2,100. Taxes would increase for every income quintile, from 7 percent to nearly 12 percent.
The Tax Foundation, which generally favors lower taxes, has estimated that expiration would lead to an average tax increase of about $2,800. And an analysis from the Brookings Institution found that tax increases would average $1,900.
Mr. Trump may have been misconstruing a different statistic. Both tax think tanks have estimated that about two-thirds of taxpayers would see an increase in taxes if the 2017 law expired.
What Was Said
“There’s also no tax on tips, no tax on Social Security, no tax on overtime.”
— Mr. Trump, in an interview on Fox Business Network on Sunday
This is exaggerated. The bill creates deductions for tips and overtime, but those breaks are temporary. And its tax reductions for Social Security benefits are even more limited.
The Senate bill would allow workers to deduct tips and overtime pay from the 2025 to 2028 tax years. The deductions are capped at $25,000 and $12,500, and decrease for individuals making more than $150,000 a year. (The House version of the bill did not include a cap, but only people making less than $160,000 annually qualified.)
Under current law, up to 85 percent of Social Security benefits are taxable for seniors making more than $25,000 and joint filers making more than $32,000. Seniors over 65 also qualify for an additional deduction. More than half of Social Security beneficiaries pay taxes on their benefits. Half of taxes paid on Social Security benefits shore up Social Security’s trust fund and 35 percent goes to the Medicare Hospital Insurance Trust Fund ($50.7 billion and $35 billion in 2023), according to the Congressional Research Service.
The Senate bill creates an additional deduction of $6,000 for seniors on top of that. (The House bill’s amount is $4,000.) That deduction phases out for higher incomes and would expire in 2028. That’s not quite eliminating all taxation on benefits.
The House’s $4,000 deduction would cost $66 billion from 2025 to 2028, according to the Joint Committee on Taxation. For context, eliminating all taxation of Social Security would cost more than $1.4 trillion over 10 years — almost 10 times as much as the Republicans’ deduction proposal.
Analyses from the Tax Foundation and the Bipartisan Policy Center found that the additional deduction would primarily benefit those with higher incomes.
What Was Said
“Senate Republicans are voting for the largest tax cut for middle-class Americans in history.”
— the Senate Republican conference on social media on Thursday
False. Several recent pieces of legislation provided bigger boosts to the middle class.
Analysis from the Tax Policy Center shows that the tax provisions in the Senate version of the bill would provide a tax cut of 1.9 percent or about $1,750 for the middle quintile of taxpayers. That amounts to a 2.2 percent increase to their after-tax income.
A coronavirus stimulus package in 2021 cut taxes by 6 percent, or $3,700, for the middle quintile. That was equal to a 6 percent increase in after-tax income, though the benefit was temporary.
Tax cuts signed into law in 2012 provided a cut of about 2.3 percent or nearly $1,200, not adjusted for inflation. That was equal to about a 2.8 increase in after-tax income.
And under the 1981 tax cut, a family of four earning $20,000 (roughly the median family income at the time) received an 11 percent tax cut, or $223, according to the Joint Committee on Taxation.
It is also worth noting that beyond tax cuts, both the Senate and the House bills contain numerous other provisions that may adversely affect the middle class. The Congressional Budget Office, in a distributional analysis of the House bill, estimated that the fifth and sixth deciles of households would see an increase of $853 and $1,256 from tax cuts, but see state and federal benefits reduced by $433 and $370.
Linda Qiu is a reporter who specializes in fact-checking statements made by politicians and public figures. She has been reporting and fact-checking public figures for nearly a decade.
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