If you’ve spent any time on social media or watching the news lately, you've probably heard ten different versions of the same story. One side says it was the greatest middle-class win in history. The other says it was a massive giveaway to the 1%. But if we’re being real, the answer to did trump lower taxes is a bit more complicated than a "yes" or "no" checkbox.
Honestly, the numbers are finally in, and since it’s 2026, we have the benefit of looking back at two major waves of legislation. First, there was the 2017 Tax Cuts and Jobs Act (TCJA). Then, just last summer in July 2025, the "One Big Beautiful Bill" Act (OBBBA) was signed into law. This second bill basically stopped the "tax cliff" everyone was panicking about, making many of those temporary 2017 cuts permanent.
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So, did he do it? Yeah. But how it hits your wallet depends entirely on whether you're punching a clock, waiting tables, or sitting on a board of directors.
The Big Picture: How the 2017 and 2025 Laws Changed Your Paycheck
Basically, the tax code underwent a massive facelift. Before Trump took office, the corporate tax rate was 35%. That's pretty high compared to the rest of the world. He slashed that down to 21% in 2017 and kept it there. But for most of us, the corporate rate is just a number on a screen. You probably care more about the brackets and that standard deduction you see every April.
Here is the thing about the standard deduction: it nearly doubled. For the 2026 tax year, single filers are looking at a $16,100 deduction, while married couples filing jointly get $32,200. Back in 2017, those numbers were about half that. This change alone made it so millions of people stopped "itemizing"—which is just a fancy way of saying they stopped keeping a shoebox full of receipts because the flat deduction was better.
The New Brackets
The seven tax rates survived the 2025 legislative battle. They currently sit at:
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- 10%, 12%, 22%, 24%, 32%, 35%, and 37%
If you feel like you're paying less, it might be because the thresholds for these brackets moved. For example, in 2026, you don't hit that top 37% rate until you're making over $640,600 as a single person.
Winners and Losers: The "No Tax on Tips" Reality
One of the loudest parts of the 2025 tax changes was the "No Tax on Tips" and "No Tax on Overtime" provisions. If you’re a bartender or a server, this is huge. You can now deduct up to $25,000 of your tip income from your federal taxes.
But—and there is always a "but"—it’s not a free-for-all. The IRS put some guardrails on this. If you’re a high-earner making over $150,000 (maybe a high-end sommelier or someone in a "specified service trade"), that deduction starts to vanish. The same goes for overtime. You can deduct the "extra" part of your overtime pay up to $12,500, but only the premium portion. If your base is $20 and OT is $30, only that extra $10 counts toward the deduction. It’s kinda confusing, and a lot of people are getting it wrong on their 2026 filings.
The Senior Bonus
If you’re over 65, there’s a new $6,000 "senior bonus" deduction. Trump campaigned on ending taxes on Social Security, and while this isn't exactly that, it functions similarly for most seniors. It effectively wipes out the federal tax bill for a huge chunk of retirees, provided their income stays under the $75,000 threshold.
The Corporate Side: Why Your Boss Might Be Happy
When we talk about whether did trump lower taxes, we have to look at the business side. The 2017 law didn't just cut the rate to 21%; it changed how businesses buy stuff.
"Bonus depreciation" is a term that sounds like a snooze-fest, but it’s the reason companies were buying new trucks and machinery like crazy. It allowed businesses to write off 100% of the cost of equipment immediately. That was supposed to phase out by 2026, but the OBBBA kept it at 100%. For small business owners, the 20% "pass-through" deduction (Section 199A) also became permanent. If you’re a freelancer or own a local shop, this is probably the biggest reason your tax bill hasn't spiked.
What People Get Wrong About the SALT Cap
You’ve probably heard people in New York or California complaining. That’s because of the SALT (State and Local Tax) cap. In 2017, it was capped at $10,000. This meant if you lived in a high-tax state, you couldn't deduct all those local taxes from your federal bill.
The 2025 law actually raised this cap to $40,000 for married couples. It’s a temporary win that lasts through 2029. It’s one of those weird nuances where "lowering taxes" actually meant "allowing people to deduct more of their other taxes."
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The Trade-Offs: The Deficit and the Fine Print
Nothing is free. The Congressional Budget Office (CBO) and groups like the Institute on Taxation and Economic Policy (ITEP) have been sounding the alarm about the cost. Extending these cuts is projected to add trillions to the national debt over the next decade.
Also, while the "One Big Beautiful Bill" saved the income tax cuts, it axed a lot of "green" credits. If you were planning on getting a tax credit for a new EV or solar panels in 2026, you’re mostly out of luck. Those incentives were gutted to help pay for the lower income tax rates.
The Trump Accounts for Kids
A new addition in 2025 was the "Trump Account." It's basically a government-seeded savings account for babies born between 2025 and 2028. The government puts in $1,000, and parents can add up to $5,000 a year tax-free. It’s meant for education or a first home down payment later in life. Sorta like a 529 plan but with a head start from Uncle Sam.
Actionable Steps for Your 2026 Taxes
It's one thing to know the history; it's another to not get audited. Here is what you should actually do right now:
- Check Your Withholding: If you’re a tipped worker or do a lot of overtime, your HR department might still be using old formulas. If they take too much out, you’re giving the government an interest-free loan. If they take too little, you’ll owe a massive chunk next April.
- Document the "Overtime Premium": Since only the extra portion of OT pay is deductible, keep your pay stubs. Don't just rely on the year-end W-2; sometimes the breakdown isn't clear enough for the new 2026 forms.
- Max the Senior Bonus: If you’re 65 or older, make sure you aren't accidentally taking the standard deduction without the $6,000 bonus. It’s a separate line item on the updated Form 1040.
- Re-evaluate EV Purchases: If you were counting on a federal credit to make a Tesla or Ford Lightning affordable, check the manufacture date. Most of those credits ended on December 31, 2025.
- Look at the SALT Cap: If you live in New Jersey, New York, or California, talk to a pro. The jump from a $10,000 cap to a $40,000 cap might make it worth itemizing again for the first time in years.
The reality of did trump lower taxes is that for the vast majority of Americans, the answer is yes—but the "how much" depends on your job, your age, and even where you live. The 2025 OBBBA essentially doubled down on the 2017 experiment, trading green energy incentives and long-term federal revenue for immediate relief in take-home pay.