The middle class hasn’t had it easy in recent years. From record inflation during the Biden administration to stubbornly high interest rates, economic sentiment hasn’t fully recovered to pre-pandemic levels. But there are clear signs that, despite these headwinds, the economic picture is improving. The U.S. economy is outperforming its global peers thanks to a competitive domestic consumer economy that lets working families keep more of what they earn. One year in, Republicans’ signature legislation is delivering for the middle class.
When President Donald Trump and Republicans in Congress passed the Working Families Tax Cuts, they made good on their promise to deliver lower taxes and a federal framework built to last. This landmark legislation reshapes the tax code to support Main Street businesses, spur domestic investment in manufacturing and energy, and deliver the largest proportional tax relief directly to the middle class.
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The predictable line from Democrats was that these tax cuts were for the rich. The Joint Committee on Taxation’s nonpartisan data blows that talking point apart. The immediate tax cuts in this law overwhelmingly benefit low- and middle-income people, with workers earning under $50,000 a year receiving the largest percentage cuts in their federal tax bills. Filers making between $15,000 and $30,000 saw their federal tax liability plunge by 27.3%. For millionaires? Just 3.3%.
The JCT further estimates that lower and middle-class households are receiving more than $600 billion in direct relief. This filing season, 62 million people took advantage of new tax relief provisions. Nearly 70% of taxpayers who received a cut under the law earn less than $100,000 annually, and the average tax refund totals nearly $3,300.
Consider a family in Ohio making $65,000 a year. Between lower tax brackets, a more than doubled standard deduction, and a $2,200 child tax credit, they’re taking home thousands more every year. That’s real money that covers months of groceries or a year of gas. Every single Democrat in Congress voted to block those savings. Republicans fought to deliver them.
Helping people also means supporting the businesses that hire them. By permanently locking in the 20% small-business deduction, 25 million entrepreneurs finally have long-term certainty to invest and grow. Experts estimate this will generate 1.2 million jobs annually and boost small-business GDP by $750 billion over the next decade. Restoring permanent 100% immediate expensing allows manufacturers to deduct factory investments right away, encouraging hiring and expanded operations here in America rather than overseas.
According to the National Association of Manufacturers, the results are already showing up on shop floors. In Arizona, a precision machine shop used 100% expensing to purchase advanced manufacturing equipment, expanding its capacity to win defense contracts and hire local workers. Community development is getting a major boost, too, with enhanced Opportunity Zone incentives projected to channel more than $100 billion in private investment into rural and distressed towns, alongside expanded housing credits to finance over a million affordable rental homes.
Take-home pay is only half the battle if energy costs devour the difference. Recent Middle East instability is a reminder that relying on foreign energy is a liability Americans can’t afford. This law ends taxpayer subsidies to foreign energy entities, ties clean fuel incentives to American producers, and backs advanced nuclear power. With average gasoline prices down significantly since the Biden era, families and small businesses are feeling immediate relief at the pump.
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Look across the Atlantic, and the contrast is clear. While European nations stifle growth with heavy capital taxes and red tape, America’s tax code actively rewards investment, hiring, and domestic production. We’re building economic momentum while our competitors lag behind.
Thanks to Trump and congressional Republicans — especially Senate Finance Committee Chairman Mike Crapo (R-ID) and House Ways and Means Committee Chairman Jason Smith (R-MO) — Americans avoided a massive tax hike and built a foundation for the long-term benefit of working families and the middle class.
Michael Zona is a partner at Bullpen Strategy Group and previously was communications director for the Senate Finance Committee.
