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Explaining Trump’s claim of a ‘68 percent’ tax increase

Estimate appears to refer to the number of taxpayers affected, not the amount of the increase

President Donald Trump, Speaker Mike Johnson, R-La., and House Republican Conference Chair Lisa McClain, R-Mich., talk with reporters before a House Republican Conference meeting on the budget reconciliation bill in the Capitol on May 20.
President Donald Trump, Speaker Mike Johnson, R-La., and House Republican Conference Chair Lisa McClain, R-Mich., talk with reporters before a House Republican Conference meeting on the budget reconciliation bill in the Capitol on May 20. (Tom Williams/CQ Roll Call)

by Saranac Hale Spencer

The Urban-Brookings Tax Policy Center estimates that, on average, Americans’ taxes would rise about 7.5 percent if the 2017 tax cuts are allowed to fully expire at the end of the year. But President Donald Trump has repeatedly claimed that if the Republican budget bill, called the One Big Beautiful Bill Act, doesn’t pass, Americans “will get a 68 percent tax increase.”

The White House did not respond to our request for information about where the president’s number came from, but it appears he may be referring to the percentage of Americans who would see a tax increase of some amount if the tax cuts expire. Some independent analyses put that percentage at close to the president’s number. But that’s not the way the president has repeatedly presented the figure.

For instance, speaking to reporters on May 25, Trump said, “If the Democrats don’t vote, it’s a 68 percent tax increase.”

In another news conference on May 30, Trump said if the bill doesn’t get approved, “you’ll have a 68 percent tax increase. You’re going to go up 68 percent. That’s a number that nobody’s ever heard of before. You’ll have a massive tax increase.”

The bill extends provisions from the 2017 Tax Cuts and Jobs Act that would expire at the end of this year. So, without an extension, individual income tax rates would revert to 2017 levels.

As we said, it is possible the president may have meant that 68 percent of Americans would see a tax increase if the bill fails.

That’s how Rep. Andy Barr, a Republican from Kentucky, framed the statistic in an interview with CNN on May 21. “Anyone who votes against this bill, whether you’re a grandstander or a Democrat who votes against this bill, is voting for a $4 trillion tax increase, a tax increase on 68 percent of Americans,” Barr said.

That’s roughly in line with the conclusions of a Tax Policy Center analysis.

“We estimate 64.2 percent of households would pay more taxes in 2026 if the law expires,” John Buhl, spokesman for the Tax Policy Center, told us in an email, referring to a March analysis of the effect of extending certain provisions of the TCJA.

Similarly, the Tax Foundation estimates 62 percent of tax filers would experience a tax increase if the TCJA provisions are allowed to expire. And Kent Smetters, a professor of business economics and public policy at the University of Pennsylvania, told us that based on a Penn Wharton Budget Model analysis, “it is true that a bit more than half of households would see their tax bill increase relative to” before the TCJA “if no bill were passed.”

In other words, the way Barr framed the statistic is defensible.

But we could find no analysis that concluded taxes would rise 68 percent on average, relative to current policy, if the bill didn’t pass. To the contrary, the Tax Policy Center put the figure at closer to 7.5 percent.

“Overall, taxes would increase by an average of about $2,100, reducing after-tax income by 2.1 percent,” Joseph Rosenberg, a senior fellow at the Urban Institute who researches federal tax issues at the TPC, explained in an email, referring to the estimated impact in 2026. “That corresponds to roughly a 7.5 percent increase in taxes, on average.”

A Tax Foundation analysis of the bill considered its effect on after-tax income — which is not the same as the effect on taxes paid. Nonetheless, in its “dynamic” model that considered the economic benefits of the tax cuts, those in the bottom 40 percent of incomes — making less than $37,364 — would see a 2.8 percent to 3.3 percent increase in after-tax income. Middle-income earners — those making between $37,364 and $71,067 — would have 2.5 percent more in after-tax income in 2026 if the bill passes. The top 20 percent of earners — those making more than $125,315 — would see a 3.8 percent increase.

It’s true that Democrats in the House unanimously opposed the budget package, which includes many other provisions in addition to extending the 2017 tax cuts. Two Republicans also voted against it, though it narrowly passed the House 215-214. The president’s comments ignore that Democrats have advocated extending the tax cuts for the vast majority of Americans, but not those earning above certain income levels.

Robert Farley contributed to this report.

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