7 Surprising Ways Trump’s Policies Raised Costs for Most Americans
A new report reveals 7 key reasons why Trump’s policies increased costs for all but the top 1% of Americans in 2026.
NASA/John Kraus/NASA
President Donald Trump’s second term has brought significant economic changes that affect Americans differently across income groups. A recent report by the Institute on Taxation and Economic Policy reveals how his policies raised expenses for almost everyone except the wealthiest 1%. Here are seven key factors explaining these rising costs in 2026.
1. Middle-Income Americans Pay $1,700 More
The report highlights that a typical American consumer in the middle 20% income bracket will face approximately $1,700 more in taxes and related costs in 2026 due to Trump’s policies. This figure sums up the financial burden felt by the vast majority of Americans, signaling significant economic pressure on middle-income households.
2. The Poorest 20% Are Also Hard Hit
Not just the middle class, but the poorest 20% of Americans will pay about $750 more in taxes and other expenses this year, according to the report. This increase shows that the lower-income groups are also bearing the brunt of these policy changes despite their limited financial resources.
3. Only the Top 1% Pays Less, Saving $12,560
Contrasting sharply with other income groups, the wealthiest 1% of Americans will pay $12,560 less in taxes and costs in 2026. This exemption underscores a growing disparity, as the richest benefit from tax cuts that outweigh the increased costs imposed on the rest.
4. One Big Beautiful Bill Act Yields $380 in New Tax Savings
The One Big Beautiful Bill Act, a major tax law enacted under Trump’s second term, provides about $380 in new tax savings for a middle-income American in 2026. When combined with existing tax cuts extended from previous years, the total tax savings for this group rises to about $1,160, according to ITEP’s appendix.
5. Tariffs and Other Policies Increase Costs by $1,850
Despite some tax relief, Trump’s other policies—such as tariffs, immigration crackdowns, and the war in Iran—are estimated to raise prices by $1,850 for the average middle-income consumer. These price increases contribute heavily to the overall higher costs Americans face.
6. Expiration of COVID-Era Health Care Credits Adds $230 Cost
The report counts the expiration of Affordable Care Act tax credits, which lowered health insurance costs during the COVID era, as a Trump administration policy decision. This expiration will cost the average middle-income American an additional $230 in 2026, further adding to their financial burden.
7. Consumer Confidence Nears All-Time Low Amid Rising Household Debt
The cumulative effect of these policies helps explain why consumer confidence is near an all-time low, even as some economic indicators show strength. Household debt is rising as families struggle with increased costs, painting a complex picture of the U.S. economy under President Trump’s second term.
While the Trump administration highlights economic growth and job creation, this detailed look at taxes and costs reveals a different reality for most Americans. The wealthiest benefit significantly, but for the majority, these policy changes translate into higher expenses and financial challenges.
