When you ask people "did Trump raise taxes," you usually get one of two very loud, very different answers. Some swear he gave everyone a massive break, while others point to their own shrinking refunds as proof of a hike. Honestly? Both sides are kinda right, which is why this is such a mess to untangle.
The big 2017 overhaul, the Tax Cuts and Jobs Act (TCJA), was the centerpiece of his first term. It slashed the corporate rate from 35% down to 21% and lowered most individual income tax brackets. If you look at the raw numbers from the IRS, the average effective tax rate for basically every income group dropped in 2018. For instance, folks making between $50,000 and $100,000 saw their average rate dip from 8.9% to 7.5%.
But that’s only half the story. While the rates went down, the "base" of what gets taxed changed. To pay for those lower rates, the law killed or capped some of the most popular deductions. For a lot of people in high-tax states, it felt like a tax hike in disguise.
The SALT Cap: A Stealth Tax Increase?
If you live in a place like New Jersey, New York, or California, you probably remember the "SALT" drama. Before 2017, you could deduct almost everything you paid in state and local taxes from your federal bill. Trump’s law slapped a $10,000 cap on that.
For a family in a high-property-tax suburb, that was a huge blow. Suddenly, $20,000 or $30,000 in local taxes couldn't be used to lower their federal burden. Even though their rate might have dropped from 28% to 24%, they were now paying that 24% on a much larger chunk of income.
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- The Standard Deduction nearly doubled ($12,000 for singles in 2018).
- Personal exemptions (the $4,050 per person you used to get) were deleted.
- The Child Tax Credit doubled to $2,000, which helped parents but didn't do much for childless couples who lost their exemptions.
This reshuffling meant some middle-class families saw their "refund" shrink, even if their total tax liability for the year was technically lower. People equate a smaller refund with a tax raise. Psychologically, it’s the same thing.
Tariffs: The Taxes You Pay at the Store
We need to talk about tariffs because they are, by definition, taxes on imported goods. During his first term, Trump slapped duties on steel, aluminum, and billions of dollars' worth of Chinese imports. In 2025, he went even further with the "One Big Beautiful Bill" (OBBBA), which brought in sweeping new tariffs.
Technically, the Chinese government doesn't pay these. The American company importing the goods pays the tax to the U.S. Customs and Border Protection. Most of the time, those companies pass that cost right to you.
Recent data from the Tax Foundation suggests these tariffs increased the average household's costs by about $1,100 in 2025. By 2026, that’s expected to hit $1,500. It’s a "consumption tax" that doesn't show up on your 1040 form, but it definitely leaves your wallet thinner.
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The 2025 "One Big Beautiful Bill" Twist
Fast forward to the present. The original 2017 individual tax cuts were set to expire at the end of 2025. If nothing had happened, almost everyone would have seen a massive, automatic tax hike on January 1, 2026.
Trump and Congressional Republicans stepped in with the OBBBA to make those lower brackets permanent. They also threw in some new sweeteners:
- No taxes on tips.
- No taxes on overtime pay.
- A temporary bump in the SALT cap to $40,000 (though it’s scheduled to snap back to $10,000 in 2030).
Who Actually Won and Who Lost?
It’s complicated. If you're a business owner, you likely saw a massive win. The corporate rate cut was permanent, and the 20% "pass-through" deduction (Section 199A) was a huge gift to S-corps and LLCs. According to the Yale Budget Lab, nearly a quarter of the total tax breaks from these laws went to the top 1% of households.
But if you're a W-2 employee in a high-tax city who doesn't have kids, the "math" of the TCJA might not have been so kind once the personal exemptions vanished and the SALT cap hit.
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The Congressional Budget Office (CBO) says the current trajectory will add about $3.4 trillion to the deficit over the next decade. That's a "future tax" in a way—someone eventually has to deal with the interest on that debt.
Actionable Steps for Your Money
The tax landscape is shifting again as the OBBBA provisions kick in. Here’s what you should actually do:
- Check your withholding. With the new "no tax on tips or overtime" rules, your HR department might need a new W-4. Don't let the government hold too much of your money interest-free.
- Rethink itemizing. With the SALT cap temporarily up to $40,400 for 2026, you might finally benefit from itemizing again instead of taking the standard deduction. Run the numbers both ways.
- Watch your "Tariff Inflation." If you're planning a major purchase—like a car or heavy appliances—keep an eye on trade news. If new 232 tariffs hit certain countries, those prices will spike overnight.
- Maximize the QBI. If you have a side hustle or freelance income, make sure you're taking the full 20% Qualified Business Income deduction. Many people leave this on the table because they think it’s only for "big" businesses.
So, did he raise them? If you’re looking at the tax code, he mostly lowered rates. But if you’re looking at your cost of living and specific lost deductions, it’s easy to see why so many Americans feel like they're paying more than ever.