Middle-income Americans face an average $900 tax increase in 2026 while the wealthiest 1% receive $117 billion in tax cuts under the One Big Beautiful Bill, according to the Institute on Taxation and Economic Policy. The data contradicts White House claims that working families benefit most from recent tax changes.

The Numbers Behind the Refunds

The IRS processed 77.8 million tax returns through March 20, 2026, showing average refunds rose from $3,284 to $3,561—a $277 increase from last year. President Trump celebrated these figures as proof his tax policies help average Americans. Yet the Tax Policy Center found that 60% of the $129 billion in individual tax savings benefits households earning over $217,000 annually. The richest 5% capture the overwhelming majority of benefits, with savings growing progressively larger at higher income levels.

Administration spokesman Kush Desai told NBC that the vast majority of working-class seniors and everyday workers would pay no taxes on Social Security, tips, or overtime income. While these provisions exist, they come with considerable limitations. Meanwhile, the legislation eliminated over $40 billion in IRS enforcement funding specifically designated for investigating wealthy tax evaders over the next decade. This matters because auditing the richest 10% returns $12 for every dollar spent, with some estimates reaching $26 per dollar invested.

Who Actually Pays More

The middle 60% of Americans in Wyoming, Nebraska, and Florida face the steepest increases, paying between $1,240 and $1,430 more on average. Ray Madoff, a Boston College Law School professor specializing in tax policy, told NBC that America’s wealthiest citizens can essentially opt out of the tax system while salary earners pay substantially more. Corporations also benefit from reduced tax burdens, with foreign investors in U.S. businesses receiving $32 billion in cuts for 2026 alone.

What This Means

The $277 average refund increase widely publicized by the administration includes high-income earners who received massive tax reductions, skewing the overall picture. The bottom 95% of taxpayers face increases driven by expanded tariffs and income tax changes. The legislation extended earlier Trump tax provisions but terminated Biden’s health tax credit, which reduced insurance costs for millions of Americans. The Tax Foundation projects these changes will deliver a $1 trillion reduction to the wealthiest Americans over ten years.