In 2025, the administration made extending the 2017 tax cuts a top goal and pushed a new law that made many of those cuts permanent. Signed on July 4, it kept the top income tax rate at 37% instead of letting it rise in 2026, made a big tax break for certain business owners (the “pass-through” deduction) permanent, and raised the estate-tax exemption to $15 million per person starting in 2026. Independent analysts say most of the benefits go to high-income households, with a large share flowing to the top 10% and especially the top 1%. The estate-tax change mostly helps very wealthy families, and the permanent business deduction delivers especially large breaks to million-dollar earners. Overall, the package strongly favors millionaires and billionaires, while lower-income households see little benefit and, after counting other policy changes, may even end up worse off.
¶ The administration made cutting and extending tax cuts a top 2025 priority
- On January 16, 2025, Treasury Secretary–designate Scott Bessent told the Senate Finance Committee that extending the 2017 tax cuts was the administration’s “top priority.” (reuters.com)
- In April 2025, the White House published an official analysis urging Congress to extend expiring TCJA provisions (lower individual rates, larger standard deduction, child credit, and the pass‑through deduction), framing expiration as a multi‑trillion‑dollar tax increase to be avoided. (whitehouse.gov)
- On April 5, 2025, Senate Republicans approved a budget blueprint designed to advance extensions of the 2017 tax cuts via reconciliation, enabling passage without Democratic votes. (cnbc.com)
- On February 25, 2025, the House adopted a budget resolution “to advance” a package built around extending the Trump tax cuts. (waysandmeans.house.gov)
¶ In July 2025, Trump signed a law that permanently extended key tax cuts affecting top earners and large estates
- On July 4, 2025, President Trump signed H.R. 1 into law—a major tax and spending package that makes his 2017 tax cuts permanent. (reuters.com)
- The enacted law permanently sets the individual rate schedule, keeping the top marginal rate at 37% rather than allowing it to revert to 39.6% in 2026. (congress.gov)
- The law makes the Section 199A qualified business income (pass‑through) deduction permanent. (congress.gov)
- The law permanently increases the estate, gift, and generation‑skipping transfer tax exemption to $15 million beginning in 2026. (congress.gov)
- A major accounting firm’s post‑enactment brief confirms H.R. 1 permanently extends key TCJA provisions. (pwc.com)
- The Tax Policy Center estimated that about 60% of the tax benefits from the House‑passed package accrue to the top income quintile in 2026. (taxpolicycenter.org)
- Penn Wharton Budget Model estimates that roughly 80% of the total value of the signed law accrues to the top 10% of households. (budgetmodel.wharton.upenn.edu)
- The Joint Committee on Taxation published official distribution tables for both the Senate bill and the enacted law, providing nonpartisan breakdowns of who benefits across income groups. (jct.gov)
- CBO’s evaluation of the House‑approved package found higher‑income households gain while lower‑income households lose net resources when combined tax and transfer changes are considered. (apnews.com)
¶ Specific features of the 2025 law deliver especially large tax cuts to millionaires and billionaires
- Permanently extending the Section 199A pass‑through deduction delivers outsized benefits to very high‑income filers; JCT found 44% of its benefits go to taxpayers with incomes above $1 million, and TPC found 55% go to the top 1%. (taxpolicycenter.org)
- IRS/CRS data show the average Section 199A deduction rises steeply with income—reaching $741,436 for AGIs above $5 million—so making it permanent preserves very large deductions for top‑income taxpayers. (congress.gov)
- Permanently increasing the estate tax exemption to $15 million ($30 million for couples) materially reduces estate tax liability for the wealthiest households; contemporaneous reporting underscored that Republicans were advancing this higher exemption in 2025. (congress.gov)
- By locking in the 37% top marginal rate rather than allowing a reversion to 39.6% in 2026, the law cuts taxes for top earners—who include most millionaires. (congress.gov)