Trump's Tax Shell Game: Bigger Refunds Hide Massive Tax Hikes on Working Americans

Despite Trump's social media boasting about "great big beautiful" tax refunds, his policies have raised taxes on 95% of Americans this year. His tariffs and the termination of health care tax credits more than wipe out any income tax cuts for everyone except the wealthiest 5%, with the bottom 60% of earners hit hardest.

President Trump wants you to focus on your tax refund. Don't fall for it.

While Trump floods social media with claims about "substantially greater" refunds from his "GREAT BIG BEAUTIFUL BILL," the numbers tell a different story: His administration has raised taxes on the vast majority of Americans in ways designed to be less visible than the refund checks he's bragging about.

According to analysis from the Institute on Taxation and Economic Policy (ITEP), Trump's net tax policies this year increase taxes on every income group except the richest 5% of Americans. The wealthy get tax cuts. Everyone else pays more.

The Tariff Tax Increase

The biggest tax hike comes from Trump's tariffs on foreign goods. Mainstream economists across the political spectrum agree that tariffs function as taxes on consumers, passed down through higher prices on everything from groceries to electronics.

These tariff costs dwarf the personal income tax cuts Trump signed into law as part of the One Big Beautiful Bill Act (OBBBA). For most American households, the price increases from tariffs alone exceed any savings they see on their tax returns.

Trump seems to be counting on voters not connecting the dots. Unlike income taxes, which get tallied up on a form each April, tariff costs are buried in the price tags Americans see every day at the store. No single receipt shows you how much extra you paid because of presidential trade policy.

Killing Health Care Credits

The second major tax increase hits working families directly on their tax returns, but it's getting far less attention than the refunds Trump is promoting.

OBBBA extended several tax cuts but deliberately let the Expanded Premium Tax Credit (EPTC) expire at the end of 2025. This credit helped millions of Americans afford health insurance through the Affordable Care Act marketplaces.

The result: Working people face higher taxes this year, and an estimated 4 million Americans will lose health insurance coverage entirely. ITEP's analysis shows the bottom 60% of earners bear most of this tax increase.

Congress and the President made a choice here. They extended tax cuts that primarily benefit higher earners while terminating a credit that helped working families stay insured.

Who Wins, Who Loses

The numbers are stark. After accounting for all of Trump's tax policies, including the OBBBA cuts, the tariff increases, and the expired health credits, average Americans in every income group below the top 5% are paying more in taxes this year than they would have without Trump's policies.

The richest 1% of Americans, meanwhile, come out ahead. The tax cuts they receive outweigh any costs from tariffs or other policy changes.

This is not an accident. It's a deliberate policy choice to shift tax burdens downward while providing relief at the top.

The Refund Distraction

Trump's February social media post about refunds being "substantially greater than ever before" was carefully timed for filing season. Some of OBBBA's provisions were made retroactive specifically so Americans would see the impact in their 2025 refunds this spring.

A bigger refund feels good. It's tangible. You can see the number on your bank statement.

What you can't see as easily is the running total of how much more you're paying at the grocery store, the gas pump, and the pharmacy because of tariff-driven price increases. You can't see the health insurance you can no longer afford because the tax credit disappeared.

Trump is betting that most voters will remember the refund and forget about everything else.

The Bottom Line

If you're in the bottom 95% of earners and you think you're paying less in taxes under Trump because you got a decent refund this year, check again. Factor in what you're paying in higher prices due to tariffs. Factor in what you're paying for health insurance now that the EPTC is gone.

For the vast majority of Americans, the math is clear: Trump has raised your taxes while cutting them for the wealthy.

The refund is just the sleight of hand that's supposed to keep you from noticing.

ITEP's full analysis, including state-by-state breakdowns of how Trump's tax policies affect residents, is available in their detailed report at itep.org.