Who Is Really Paying More? What the “OBBBA” Impact Actually Was

By Will Campbell · October 18, 2026 · Taxes and Cost of Living Analysis

Who Is Really Paying More? What the OBBBA’s Impact Actually Was

The One Big Beautiful Bill Act cut 2026 federal taxes for six of seven income groups, including $1,160 for a middle-income household. What families feel instead is prices: the Biden-era increase above forecast costs that same household about $6,440 this year, more than five times the tax savings.

🕐 12 min read 📊 ITEP data October 2026; BLS prices through September 2026 📄 Sources: ITEP, CBO, CRS, BLS, House Clerk

−$1,160

Middle-Class Tax Cut

OBBBA vs. prior law, middle 20%, 2026

93%

Of the Added Cost Is Prices

$2,260 of $2,420, all households

54%

Of the Price Gap Came After the War Began

Built after Q1 2026

$6,440

Biden-Era Price Cost, 2026

Middle 20%: 5.6× the $1,160 tax cut

In This Article

Executive Summary 1 — What the Graphic Adds 2 — Taxes Alone 3 — The Health Credit 4 — The Price Gap 5 — Same Test, Biden Term 6 — Correcting the Graphic 7 — The Bottom Line Inspect the Data

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Key Facts

• −$1,160 OBBBA tax change, middle 20%, vs. prior law
• 6 of 7 income groups get a tax cut vs. prior law
• 93% of the graphic’s added cost is prices
• Jan 1, 2026 health-credit sunset, set by the 2022 IRA
• 1.4% prices above CBO’s Jan 2025 forecast
• 54% of that gap built after the Iran war began
• 11.2% Biden-term gap by the same test
• $6,440 2026 cost of the Biden-era gap, middle 20%

Executive Summary

The key findings of this report at a glance

A graphic from the Institute on Taxation and Economic Policy (ITEP) says every income group except the richest 1% is “paying more” in 2026 because of President Trump’s tax and economic policies. We downloaded ITEP’s own data, CBO’s forecasts, and BLS price data to see what is inside those numbers. [ITEP, 2026a]

• The graphic adds three different things together. Its totals combine (a) new tax provisions in the One Big Beautiful Bill Act (OBBBA), (b) the expiration of an enhanced health-insurance tax credit, and (c) prices that rose faster than a CBO forecast. ITEP’s arithmetic is correct; the label is the problem. Section 1
• On taxes alone, the OBBBA is a tax cut for six of seven income groups. Measured against the law that would otherwise have applied in 2026, when the 2017 tax cuts were set to expire, the middle 20% pays $1,160 less and the fourth 20% pays $2,570 less, by ITEP’s own figures. The graphic leaves those extensions out. Section 2
• The health-credit increase was scheduled by Democrats. The enhanced credit was created by the American Rescue Plan and extended by the Inflation Reduction Act only through 2025. Both passed without a single Republican vote. The OBBBA did not change the expiration date. Section 3
• Most of the “paying more” is prices, measured against a forecast. Prices make up 93% of the average added cost. As of the third quarter of 2026, prices were 1.4% above what CBO forecast in January 2025, and about 54% of that gap built up after the Iran war began. Section 4
• The same test is about 8 times worse for the Biden term, and it outweighs the tax cut. Prices ended the Biden term 11.2% above the forecast CBO made in February 2021. Applied to actual household spending, that gap costs a middle-income household about $6,440 in 2026, 5.6 times its $1,160 OBBBA tax cut. Without the Biden-era increase, that household would keep about $7,600 more a year. Section 5
• What is fair to say. The richest 1% do receive the largest tax cuts in dollars, and tariffs have raised some prices. But “every income group is paying more because of Trump’s tax policies” is not what ITEP’s own tax numbers show. Section 6

Bottom Line

The OBBBA lowers federal taxes for most working families in 2026. The price increases families feel are real, but most of today’s price level was set from 2021 to 2024, and that Biden-era increase costs the typical family several times what the tax cut saves. Section 7

1

What the Graphic Adds Together

Three different things are combined into one number for each income group

The post this analysis responds to. View the original post on Facebook.

This post shares a graphic from the Institute on Taxation and Economic Policy (ITEP). It shows one bar per income group: +$750 for the poorest 20%, +$1,700 for the middle 20%, and −$12,560 for the richest 1%. Its own footnote explains that each bar adds together three separate items: new tax policies in the OBBBA, the expiration of the Enhanced Premium Tax Credit, and “price increases occurring during Trump’s second term beyond what was initially projected.” [ITEP, 2026a]

ITEP’s full report breaks each bar into those three pieces, and we downloaded the underlying data file. The pieces add up exactly to the graphic’s totals. For the middle 20%, the +$1,700 is $1,850 in higher prices, $230 from the health credit expiring, and a $380 tax cut from new OBBBA policies. [ITEP, 2026b]

So the graphic is not mainly about taxes. Across all households, prices account for $2,260 of the $2,420 in added costs, or 93%. For every group from the middle 20% up, the OBBBA’s new tax policies are a cut, not an increase.

The Three Pieces Share of Income Table

Each Bar in the Graphic Is Mostly Prices

Stacked bars show ITEP’s three components; the diamond marks the total shown in the graphic.

Chart

What Makes Up Each Bar in the Graphic, 2026

Average change per household, groups up to $960,600 (ITEP Figure 5)

Source. Institute on Taxation and Economic Policy, Figure 5 and national data file, October 2026. [ITEP, 2026a] [ITEP, 2026b]

Note. Components add to the graphic’s totals. The richest 1% is left off the chart so the other bars are readable: prices +$15,990, new tax policies −$28,550, total −$12,560 (see the table).

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As a Share of Income, Prices Hit Lower Incomes Hardest

The same three pieces as a share of each group’s average income, from ITEP’s data file.

Chart

Each Piece as a Share of Average Income, 2026

Percent of average income by income group

Source. Institute on Taxation and Economic Policy, Figure 5 and national data file, October 2026. [ITEP, 2026a] [ITEP, 2026b]

Note. From ITEP’s downloadable national data file (sheet “national&state compare sept2026”).

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The Numbers Behind the Graphic

Dollar values for every income group, including the all-household average.

Table

ITEP Components by Income Group, 2026

Average change per household (dollars)

Income group	Income range	Avg. income	Prices above forecast	EPTC expiration	OBBBA new tax policies	Graphic total
Poorest 20%	$0–$23,500	$12,900	+$530	+$130	+$90	+$750
Second 20%	$23,500–$46,600	$34,400	+$1,170	+$420	$0	+$1,590
Middle 20%	$46,600–$80,100	$62,000	+$1,850	+$230	−$380	+$1,700
Fourth 20%	$80,100–$148,300	$109,100	+$2,760	+$40	−$1,070	+$1,730
Next 15%	$148,300–$360,000	$217,700	+$3,920	$0	−$2,230	+$1,690
Next 4%	$360,000–$960,600	$539,500	+$5,700	$0	−$4,580	+$1,120
Richest 1%	$960,600+	$2,848,700	+$15,990	$0	−$28,550	−$12,560
All households		$125,100	+$2,260	+$160	−$1,070	+$1,360

Source. Institute on Taxation and Economic Policy, Figure 5 and national data file, October 2026. [ITEP, 2026a] [ITEP, 2026b]

Note. The all-household average components sum to $1,350; ITEP reports $1,360 because of rounding.

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2

Taxes Alone: The OBBBA Cut Taxes for Most Households

The graphic’s tax figure leaves out the law’s biggest provision for working families

The 2017 tax cuts (lower rates, a larger standard deduction, and a $2,000 child credit) were written to expire at the end of 2025. Without the OBBBA, nearly every household would have faced a tax increase on January 1, 2026. The OBBBA made those provisions permanent. [ITEP, 2026a]

ITEP’s graphic counts only the OBBBA’s new tax policies and treats the extensions as if they had already been law. ITEP’s own Figure 6 shows the other comparison, against the law that would otherwise have applied. On that basis, the OBBBA cuts taxes for six of seven income groups:

• Middle 20%: $1,160 less in federal taxes in 2026
• Second 20%: $370 less; fourth 20%: $2,570 less
• Poorest 20%: +$20, essentially no change, because many in this group owe no income tax

Even after adding the health-credit expiration, taxes are lower for the middle 20% and every group above it. The richest 1% receive the largest cut in dollars, which is a fair point for critics. But the claim that “every income group is paying more” does not hold for taxes.

The Provisions Families Hear About

ITEP groups the tax breaks on tips, overtime, car-loan interest, and the extra senior deduction as “politically prominent proposals.” They save the middle 20% about $310 and the fourth 20% about $630 in 2026, on top of the rate and child-credit extensions. [ITEP, 2026a]

Vs. Prior Law Three Tax Baselines Tax Table Provisions Texas

Against the Law That Would Have Applied, Six of Seven Groups Get a Tax Cut

Extensions of the 2017 cuts plus new OBBBA provisions; the diamond marks the net change in taxes.

Chart

OBBBA Tax Changes vs. Prior Law, 2026

Average change in federal taxes per household, groups up to $360,000 (ITEP Figure 6)

Source. Institute on Taxation and Economic Policy, Figures 6 and 7, October 2026. [ITEP, 2026a]

Note. Prior law = the 2017 cuts expiring after 2025 as written. The two top groups are left off for scale (Next 4% −$16,880; richest 1% −$70,240); see the table.

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How You Count Taxes Changes the Answer

The graphic’s tax figure versus counting the extensions, for the five groups below $360,000.

Chart

Three Ways to Count the 2026 Tax Change

Average change per household, income groups up to $360,000

Source. Institute on Taxation and Economic Policy, Figures 6 and 7, October 2026. [ITEP, 2026a]

Note. The top two groups are omitted from this view so the smaller values are readable; all groups are in the table.

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Tax Changes by Group, Every Baseline

Dollar values for all seven groups and the all-household average.

Table

OBBBA Tax Changes vs. Prior Law, With and Without the Health Credit

Average change per household (dollars)

Income group	Extensions of 2017 cuts	New OBBBA policies	Net vs. prior law	Plus EPTC expiration	Graphic’s tax figure
Poorest 20%	−$70	+$90	+$20	+$150	+$220
Second 20%	−$370	$0	−$370	+$50	+$420
Middle 20%	−$780	−$380	−$1,160	−$930	−$150
Fourth 20%	−$1,500	−$1,070	−$2,570	−$2,530	−$1,030
Next 15%	−$3,030	−$2,230	−$5,260	−$5,260	−$2,230
Next 4%	−$12,300	−$4,580	−$16,880	−$16,880	−$4,580
Richest 1%	−$41,690	−$28,550	−$70,240	−$70,240	−$28,550
All households	−$1,900	−$1,070	−$2,970	−$2,810	−$910

Source. Institute on Taxation and Economic Policy, Figures 6 and 7, October 2026. [ITEP, 2026a]

Note. “Graphic’s tax figure” = new OBBBA policies + EPTC expiration, the two tax pieces in the graphic.

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Which Provisions Drive the Tax Changes

ITEP’s provision-by-provision estimate against prior law.

Table

OBBBA Provisions by Income Group vs. Prior Law, 2026

Average change per household (ITEP Figure 7)

Provision (vs. prior law)	Bottom 20%	Second 20%	Middle 20%	Fourth 20%	Next 15%	Next 4%	Top 1%	Total
Changes to rates and brackets	$0	−$90	−$530	−$1,460	−$3,010	−$1,100	−$29,000	−$1,200
Standard deduction, personal exemption, Child Tax Credit	−$60	−$330	−$410	−$370	−$20	−$160	−$160	−$240
Pass-through businesses deduction	$0	−$10	−$30	−$80	−$390	−$2,270	−$22,350	−$390
More generous Alternative Minimum Tax (AMT)	$0	$0	$0	−$10	−$670	−$12,170	−$7,950	−$670
Changes to itemized deductions including SALT cap & others	$0	$0	$20	$60	$220	$2,110	$26,020	$390
Estate and gift tax	$0	$0	$0	−$30	−$190	−$940	−$4,420	−$120
Politically prominent proposals*	$0	−$80	−$310	−$630	−$800	−$180	−$40	−$330
Limit Affordable Care Act credits	$90	$130	$120	$40	$0	$0	$0	$80
Limit/repeal green energy provisions	$10	$30	$70	$130	$280	$690	$4,380	$160
Changes for corporations and other businesses	−$10	−$30	−$80	−$220	−$680	−$2,870	−$36,730	−$650
Total combined impact	$20	−$370	−$1,160	−$2,570	−$5,260	−$16,880	−$70,240	−$2,970

Source. Institute on Taxation and Economic Policy, Figures 6 and 7, October 2026. [ITEP, 2026a]

Note. “Politically prominent proposals” = tips, overtime, car-loan interest, the extra senior deduction, and donations for school vouchers (ITEP’s footnote).

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The Same Estimates for Texas

ITEP’s state file for Texas; dollar values are share of income times average income.

Table

ITEP Estimates for Texas Households, 2026

Average change per household (dollars, derived)

Income group (Texas)	Income range	Avg. income	Prices above forecast	EPTC expiration	OBBBA new tax policies	Total (graphic method)	Taxes only (EPTC + OBBBA)
Poorest 20%	$0–$21,700	$11,900	+$500	+$190	+$130	+$820	+$320
Second 20%	$21,700–$42,400	$31,300	+$1,120	+$620	+$110	+$1,850	+$730
Middle 20%	$42,400–$73,800	$56,800	+$1,790	+$370	−$220	+$1,940	+$150
Fourth 20%	$73,800–$140,300	$101,400	+$2,770	+$80	−$900	+$1,940	−$820
Next 15%	$140,300–$350,000	$208,800	+$4,010	$0	−$1,820	+$2,200	−$1,820
Next 4%	$350,000–$922,500	$521,500	+$5,960	$0	−$3,440	+$2,520	−$3,440
Richest 1%	$922,500–and above	$2,845,600	+$16,840	$0	−$29,610	−$12,770	−$29,610
All households		$119,500	+$2,240	+$250	−$870	+$1,620	−$620

Source. ITEP national and state data file, Texas block. [ITEP, 2026b]

Note. ITEP publishes Texas results as shares of income; dollars are those shares times ITEP’s average Texas income for each group, rounded to $10.

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3

The Health Credit Was Written to Expire

Democrats set the end date in 2022; the OBBBA did not change it

The second piece of the graphic is the end of the Enhanced Premium Tax Credit, a larger subsidy for health plans bought through the Affordable Care Act marketplace. It is presented as a Trump policy. The legislative record shows otherwise. [CRS, 2026a]

• The American Rescue Plan (March 2021) created the enhanced credit for 2021 and 2022 only. It passed the House 220–211 with no Republican votes. [House Clerk, 2021]
• The Inflation Reduction Act (August 2022) extended it through 2025 and set the sunset date of January 1, 2026. It passed the House 220–207 with no Republican votes. [Congress.gov, 2022] [House Clerk, 2022]
• The OBBBA changed other credit rules (eligibility checks and repayment) but, according to the Congressional Research Service, “did not affect expiration of the enhanced PTC.” [CRS, 2026a]

The basic premium credit continues in 2026; only the temporary enhancement ended. [IRS, n.d.] Critics argue Congress should have extended it, and that is a fair policy debate. But the increase follows the date Democrats wrote into law, not a change made by the OBBBA. In Texas, where marketplace enrollment is high, ITEP estimates this piece at about $620 for the second 20%. [ITEP, 2026b]

Who Lost the Credit Timeline

The Credit Expiration Mostly Affects Lower and Middle Incomes

ITEP’s estimate of the 2026 added cost, U.S. and Texas.

Chart

Cost of the Enhanced Credit Expiring, 2026

Average added cost per household by income group

Source. ITEP Figure 5 and national and state data file. [ITEP, 2026a] [ITEP, 2026b]

Note. Texas values are ITEP’s shares of income times average Texas income, rounded to $10.

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Who Set the Expiration Date

The three laws that created, extended, and left in place the January 1, 2026, sunset.

Table

Enhanced Premium Tax Credit: Legislative Timeline

Created 2021, extended 2022, expired January 1, 2026

Date	Law	What it did to the enhanced credit	Final House vote
Mar 11, 2021	American Rescue Plan Act (P.L. 117-2)	Created the enhanced credit for tax years 2021 and 2022	220–211; 0 Republican yeas
Aug 16, 2022	Inflation Reduction Act (P.L. 117-169)	Extended it for 2023–2025 and set the sunset: January 1, 2026	220–207; 0 Republican yeas
Jul 4, 2025	One Big Beautiful Bill Act (P.L. 119-21)	Did not change the expiration date (other credit rules changed)	218–214
Jan 1, 2026	—	Enhanced credit expires as scheduled; the base credit continues	—

Source. Congressional Research Service R48290; Congress.gov; Office of the Clerk, U.S. House. [CRS, 2026a] [Congress.gov, 2021] [Congress.gov, 2022] [Congress.gov, 2025] [House Clerk, 2021] [House Clerk, 2022]

Note. Senate votes: American Rescue Plan 50–49; Inflation Reduction Act 51–50; OBBBA 51–50.

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4

The Price Piece Is Measured Against a Forecast

Most of the “paying more” is prices rising faster than CBO predicted, and much of that came with the Iran war

The largest part of every bar is prices. ITEP does not measure how much prices rose. It measures the gap between actual inflation and what the Congressional Budget Office forecast in January 2025, then attributes that whole gap to Trump’s policies, naming tariffs, the Iran war, and immigration. [ITEP, 2026a]

We rebuilt that gap from CBO’s published forecast and BLS data. From the fourth quarter of 2024 to the third quarter of 2026, CBO forecast prices would rise 4.2%. They actually rose 5.6%, leaving prices 1.4% above the forecast. [CBO, 2025a] [BLS, 2026a]

The timing matters. By the first quarter of 2026, after a year of tariffs, prices were only 0.64% above forecast. The gap more than doubled after the United States and Israel began military operations against Iran on February 28, 2026, and gasoline jumped 21% in a single month. [CRS, 2026b] About 54% of the gap built up after that. Had all prices grown like non-energy prices after February 2026, the price level in the third quarter would have been about 0.9% lower, which is roughly 62% of the gap.

What This Does and Does Not Show

Tariffs did raise some prices. A Federal Reserve analysis estimates they added about 0.8% to core PCE prices through February 2026 (a different price index than the CPI). [Minton et al., 2026] But a gap against a forecast is not the same as a policy effect. Forecasts miss for many reasons, and a war-driven oil shock is the kind of event no forecast includes.

Actual vs. Forecast Gap by Quarter Energy Shock Tables

Prices Tracked Close to CBO’s Forecast Until the War

Cumulative change in the CPI since late 2024: actual versus CBO’s January 2025 forecast.

Chart

Actual Prices vs. CBO’s January 2025 Forecast

CPI-U, cumulative percent change since Q4 2024 (quarterly averages)

Source. BLS CPI-U, seasonally adjusted (CUSR0000SA0), quarterly averages; CBO January 2025 economic projections (quarterly CPI-U). [BLS, 2026a] [CBO, 2025a]

Note. Q4 2025 averages two months because BLS did not publish October 2025 CPI. The war marker is placed at the end of Q1 2026.

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More Than Half the Gap Came After the War Began

How far actual prices sat above the forecast each quarter. Red bars are after the war began.

Chart

Prices Above CBO’s Forecast, by Quarter

Actual price level divided by forecast level, minus one (%)

Source. BLS CPI-U, seasonally adjusted (CUSR0000SA0), quarterly averages; CBO January 2025 economic projections (quarterly CPI-U). [BLS, 2026a] [CBO, 2025a]

Note. Gold = before the Iran war; red = after.

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Energy Explains Most of the 2026 Jump

Actual CPI compared with what it would have been if all prices had grown like non-energy prices after February 2026.

Chart

The 2026 Energy Shock in the Price Level

CPI-U, seasonally adjusted, February–September 2026

Source. BLS CPI-U all items (CUSR0000SA0) and all items less energy (CUSR0000SA0LE). [BLS, 2026a]

Note. The comparison line holds February 2026 fixed and applies the monthly growth of all items less energy. A simple decomposition, not a model of the war’s full effects.

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The Numbers Behind the Price Gap

Quarterly forecast comparison and the monthly energy decomposition.

Table

Actual CPI-U vs. CBO January 2025 Forecast

Quarterly averages, seasonally adjusted

Quarter	Actual CPI-U (SA, avg.)	CBO Jan 2025 forecast	Actual change since Q4 2024	Forecast change	Prices above forecast
Q4 2024	316.588	316.169	+0.00%	+0.00%	0.00%
Q1 2025	319.475	317.891	+0.91%	+0.55%	0.36%
Q2 2025	320.786	319.537	+1.33%	+1.06%	0.26%
Q3 2025	323.235	321.487	+2.10%	+1.68%	0.41%
Q4 2025 †	325.547	323.556	+2.83%	+2.34%	0.48%
Q1 2026	328.114	325.581	+3.64%	+2.98%	0.65%
Q2 2026	332.985	327.493	+5.18%	+3.58%	1.54%
Q3 2026	334.414	329.398	+5.63%	+4.18%	1.39%

Source. BLS CPI-U, seasonally adjusted (CUSR0000SA0), quarterly averages; CBO January 2025 economic projections (quarterly CPI-U). [BLS, 2026a] [CBO, 2025a]

Note. † Two-month average (October 2025 not published by BLS).

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Table

Energy Shock Decomposition, February–September 2026

CPI-U, seasonally adjusted

Month	Actual CPI-U (SA)	Without energy shock	Gap
Feb 2026	327.460	327.460	0.00%
Mar 2026	330.293	328.004	0.70%
Apr 2026	332.407	329.300	0.94%
May 2026	333.979	329.961	1.22%
Jun 2026	332.568	330.013	0.77%
Jul 2026	332.813	330.657	0.65%
Aug 2026	334.131	331.535	0.78%
Sep 2026	336.298	332.506	1.14%

Source. BLS CPI-U (CUSR0000SA0, CUSR0000SA0LE). [BLS, 2026a]

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5

The Same Test Applied to the Biden Term

Measured ITEP’s way, the Biden-era price gap was about eight times larger

If prices running ahead of CBO’s forecast counts as a cost of the current administration’s policies, the same yardstick should apply to the last one. In February 2021, CBO forecast that consumer prices would rise 1.9% in 2021, 2.2% in 2022, 2.3% in 2023, and 2.4% in 2024. [CBO, 2021]

Actual inflation was 6.8%, 7.1%, 3.2%, and 2.7%. Over the four years, CBO expected prices to rise 9.1%; they rose 21.3%. Prices ended the Biden term 11.2% above forecast, about 8 times the 1.4% gap so far under Trump II. Even per year, the Biden-term gap (2.7% a year) was about 3 times as fast. [BLS, 2026a]

What the Biden-Era Increase Costs Families Compared With the Tax Cut

Because prices rarely fall, that higher price level is still built into what families pay in 2026. To put a dollar figure on it, we applied both forecast gaps to what households actually spend, using the Bureau of Labor Statistics Consumer Expenditure Survey for 2024, brought to 2026 prices. [BLS, 2025]

• A middle-income household spends about $64,240 a year on goods and services. Because prices are 11.2% above CBO’s 2021 forecast path, about $6,440 of that is the Biden-era increase above forecast.
• Its OBBBA tax cut against prior law is $1,160, so the Biden-era price increase costs it 5.6 times what the tax cut saves. For the fourth 20%, it is $8,290 against a $2,570 tax cut.
• Had the Biden-era increase not happened, the middle 20% would keep about $7,600 more a year: its $1,160 tax cut plus the $6,440 it would not be spending on the same purchases.
• Measured the same way, the Trump II gap so far costs that household about $790. That is less than ITEP’s $1,850, which uses ITEP’s own consumption model.

How These Figures Are Calculated

2026 spending = 2024 Consumer Expenditure Survey average annual expenditures minus personal insurance and pensions (payroll and retirement contributions, not consumer prices), raised by the CPI-U from its 2024 average to its January–September 2026 average. The Biden-era cost is the share of that spending due to prices being 11.15% above CBO’s February 2021 path. CE quintiles are by household income and do not match ITEP’s income ranges exactly, and the Top 20% tax cut is ITEP’s weighted average of its top three groups. Like ITEP’s figure, these measure a forecast miss, not the effect of any one policy.

Forecast vs. Actual Biden Years Tax Cut vs. Prices Tables

The Biden-Era Price Gap Was About Eight Times Larger

CBO’s forecast at the start of each term, the actual change, and the gap.

Chart

Prices vs. CBO’s Start-of-Term Forecast, Two Terms

CPI-U, cumulative percent change

Source. CBO Budget and Economic Outlook (February 2021, Table 2-1); CBO January 2025 projections; BLS CPI-U. [CBO, 2021] [CBO, 2025a] [BLS, 2026a]

Note. Biden window: Q4 2020 to Q4 2024 (16 quarters). Trump II: Q4 2024 to Q3 2026 (7 quarters).

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Inflation Ran Far Above Forecast in 2021 and 2022

CBO’s February 2021 forecast versus actual inflation, year by year.

Chart

CBO’s February 2021 Forecast vs. Actual Inflation

CPI-U, fourth quarter to fourth quarter (%)

Source. CBO (2021), Table 2-1; BLS CPI-U SA quarterly averages. [CBO, 2021] [BLS, 2026a]

Note. CBO published one value (2.4%) for 2024–2025; it is used for 2024.

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The Biden-Era Price Increase Outweighs the Tax Cut

For each income quintile: the OBBBA tax cut, and what the Biden-era and Trump II above-forecast prices cost in 2026.

Chart

OBBBA Tax Cut vs. Above-Forecast Price Costs, 2026

Dollars per household, by income quintile

Source. ITEP Figure 6; BLS Consumer Expenditure Survey 2024 (Table 1101); CBO (2021, 2025a); BLS CPI-U; author calculations. [ITEP, 2026a] [BLS, 2025] [CBO, 2021]

Note. Poorest 20% shows a $20 tax increase (negative bar). Top 20% tax cut is ITEP’s weighted average of its top three groups.

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The Numbers Behind the Comparison

Two-term forecast comparison, the tax-cut-versus-prices figures, and the timing split.

Table

Prices vs. Start-of-Term CBO Forecast

CPI-U, cumulative

Term	Window	CBO forecast at start	Actual change	Prices above forecast	Per year
Biden	Q4 2020–Q4 2024 (16 quarters)	+9.09% (Feb 2021)	+21.25%	11.15%	2.68%
Trump II	Q4 2024–Q3 2026 (7 quarters)	+4.18% (Jan 2025)	+5.63%	1.39%	0.79%

Source. CBO (2021, 2025a); BLS CPI-U. [CBO, 2021] [CBO, 2025a] [BLS, 2026a]

Note. “Per year” annualizes the gap over each window.

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Table

OBBBA Tax Cut vs. Above-Forecast Price Costs by Quintile, 2026

Dollars per household

Income group (CE quintile)	2026 consumer spending	OBBBA tax cut vs. prior law	Biden-era above-forecast prices	Trump II above-forecast prices	Kept without Biden-era prices
Poorest 20%	$36,370	−$20	−$3,650	−$450	+$3,630
Second 20%	$50,140	+$370	−$5,030	−$620	+$5,400
Middle 20%	$64,240	+$1,160	−$6,440	−$790	+$7,600
Fourth 20%	$82,650	+$2,570	−$8,290	−$1,020	+$10,860
Top 20%	$130,340	+$10,830	−$13,080	−$1,610	+$23,910

Source. ITEP Figure 6; BLS Consumer Expenditure Survey 2024; CBO; BLS CPI-U; author calculations. [ITEP, 2026a] [BLS, 2025]

Note. “Kept without Biden-era prices” = the OBBBA tax cut plus the Biden-era above-forecast price cost the household would not be spending. Negative tax values are increases.

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Table

ITEP Price Cost Split by Timing

Dollars per household, 2026

Income group	ITEP price cost, Trump II	Built before the war (by Q1 2026)	Built after the war began
Poorest 20%	+$530	+$250	+$280
Second 20%	+$1,170	+$540	+$630
Middle 20%	+$1,850	+$860	+$990
Fourth 20%	+$2,760	+$1,280	+$1,480
Next 15%	+$3,920	+$1,820	+$2,100
Next 4%	+$5,700	+$2,650	+$3,050
Richest 1%	+$15,990	+$7,420	+$8,570

Source. ITEP Figure 5; author calculations. [ITEP, 2026a]

Note. Split uses the share of the gap present by Q1 2026 (0.64% of 1.39%).

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6

Correcting the Graphic

What it gets right, what it leaves out, and a fair way to say it

ITEP is a left-leaning research group, and its arithmetic checks out: the three pieces add to the totals in the graphic. The problem is the headline. It says families are “paying more as a result of key Trump tax and economic policies,” but most of the added cost is prices measured against a forecast, and the tax piece leaves out the extensions that prevented a tax increase for nearly everyone.

Claim vs. Data

The Graphic’s Claims, Checked

Each implied claim compared with ITEP’s own data, CRS, CBO, and BLS.

Table

What the Graphic Says vs. What the Data Show

ITEP graphic, October 2026

What the graphic says or implies	What the data show
“Every income group is paying more as a result of key Trump tax … policies”	Counting taxes alone against the law that would otherwise have applied, the OBBBA cuts taxes for six of seven groups; the middle 20% saves $1,160. The poorest 20% see +$20 (ITEP Fig. 6).
The tax piece is “new tax policies enacted as part of the OBBBA”	The graphic leaves out the OBBBA’s largest provision for working families: stopping the 2017 tax cuts from expiring. That alone saves the middle 20% $780 and the fourth 20% $1,500.
The health-credit loss is a Trump policy	The enhanced credit was written to expire on January 1, 2026, by the Inflation Reduction Act, which passed without a single Republican vote. The OBBBA did not change that date (CRS).
Households are “paying more”	Mostly prices: $2,260 of the $2,420 average added cost (93%). The price figure is measured against a CBO forecast, not against last year’s prices.
Higher prices are from Trump policies	About 54% of the above-forecast price gap built up after the Iran war began on February 28, 2026, much of it gasoline and energy. Tariffs did add some (about 0.8% to core PCE prices by Feb 2026, per a Federal Reserve note).
This is unusual	By the same test, prices ended the Biden term 11.2% above CBO’s forecast, versus 1.4% so far under Trump II, about 8 times as large.

Source. ITEP (2026a, 2026b); CRS (2026a); CBO (2021, 2025a); BLS (2026a); Minton et al. (2026). [ITEP, 2026a] [CRS, 2026a] [CBO, 2025a]

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What Critics Get Right

The richest 1% receive the largest tax cuts, about $28,550 a year in new provisions and $70,240 against prior law. And CBO’s analysis of the full law, which also counts spending changes such as Medicaid and SNAP, found the lowest-income tenth of households would lose resources on average over 2026–2034. That is a different question from the 2026 tax and price claim in the graphic, but it is part of a complete picture. [CBO, 2025b]

On taxes alone, measured against the law that would otherwise have applied, the OBBBA cuts 2026 federal taxes for six of seven income groups, including $1,160 for the middle 20%.

Finding from ITEP’s own Figure 6, October 2026

7

The Bottom Line

What families are actually paying for in 2026

• Taxes: the OBBBA lowered 2026 federal taxes for most working families by keeping the 2017 tax cuts from expiring, and added new breaks for tips, overtime, car loans, and seniors.
• Health credit: the enhanced credit ended on the date written into the Inflation Reduction Act, which passed with only Democratic votes.
• Prices: prices are 1.4% above CBO’s January 2025 forecast, more than half of that from the 2026 energy shock. By the same test, the Biden term left prices 11.2% above forecast. That higher price level has not come down, and it costs a middle-income family about $6,440 in 2026, 5.6 times its tax cut. (See our companion report, Where Prices Went Up — and Why They Never Came Back Down.)

A Fair Comparison

Families are right that things cost more. Most of that is the price level set from 2021 to 2024, plus the 2026 energy shock. Calling it the result of a tax law that cut most families’ taxes mixes up three different things. Keeping taxes low while bringing energy prices down is the path that actually helps household budgets.

Inspect the Data

Every number in this report, by source. Each table can be downloaded as a CSV.

1 — ITEP Components 2 — Taxes vs. Prior Law 3 — Price Gap 4 — Sources

ITEP’s Three Components

The graphic’s totals broken into prices, the health credit, and new OBBBA tax policies.

Table

ITEP Figure 5 Components

Dollars per household, 2026

Income group	Income range	Avg. income	Prices above forecast	EPTC expiration	OBBBA new tax policies	Graphic total
Poorest 20%	$0–$23,500	$12,900	+$530	+$130	+$90	+$750
Second 20%	$23,500–$46,600	$34,400	+$1,170	+$420	$0	+$1,590
Middle 20%	$46,600–$80,100	$62,000	+$1,850	+$230	−$380	+$1,700
Fourth 20%	$80,100–$148,300	$109,100	+$2,760	+$40	−$1,070	+$1,730
Next 15%	$148,300–$360,000	$217,700	+$3,920	$0	−$2,230	+$1,690
Next 4%	$360,000–$960,600	$539,500	+$5,700	$0	−$4,580	+$1,120
Richest 1%	$960,600+	$2,848,700	+$15,990	$0	−$28,550	−$12,560
All households		$125,100	+$2,260	+$160	−$1,070	+$1,360

Source. Institute on Taxation and Economic Policy, Figure 5 and national data file, October 2026. [ITEP, 2026a] [ITEP, 2026b]

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OBBBA vs. Prior Law

Tax changes counting the 2017 extensions.

Table

ITEP Figure 6

Dollars per household, 2026

Income group	Extensions of 2017 cuts	New OBBBA policies	Net vs. prior law	Plus EPTC expiration	Graphic’s tax figure
Poorest 20%	−$70	+$90	+$20	+$150	+$220
Second 20%	−$370	$0	−$370	+$50	+$420
Middle 20%	−$780	−$380	−$1,160	−$930	−$150
Fourth 20%	−$1,500	−$1,070	−$2,570	−$2,530	−$1,030
Next 15%	−$3,030	−$2,230	−$5,260	−$5,260	−$2,230
Next 4%	−$12,300	−$4,580	−$16,880	−$16,880	−$4,580
Richest 1%	−$41,690	−$28,550	−$70,240	−$70,240	−$28,550
All households	−$1,900	−$1,070	−$2,970	−$2,810	−$910

Source. Institute on Taxation and Economic Policy, Figures 6 and 7, October 2026. [ITEP, 2026a]

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CPI vs. CBO Forecasts

Quarterly price gap and the two-term comparison.

Table

Actual vs. Forecast, Trump II

Quarterly

Quarter	Actual CPI-U (SA, avg.)	CBO Jan 2025 forecast	Actual change since Q4 2024	Forecast change	Prices above forecast
Q4 2024	316.588	316.169	+0.00%	+0.00%	0.00%
Q1 2025	319.475	317.891	+0.91%	+0.55%	0.36%
Q2 2025	320.786	319.537	+1.33%	+1.06%	0.26%
Q3 2025	323.235	321.487	+2.10%	+1.68%	0.41%
Q4 2025 †	325.547	323.556	+2.83%	+2.34%	0.48%
Q1 2026	328.114	325.581	+3.64%	+2.98%	0.65%
Q2 2026	332.985	327.493	+5.18%	+3.58%	1.54%
Q3 2026	334.414	329.398	+5.63%	+4.18%	1.39%

Source. BLS CPI-U, seasonally adjusted (CUSR0000SA0), quarterly averages; CBO January 2025 economic projections (quarterly CPI-U). [BLS, 2026a] [CBO, 2025a]

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Table

Two-Term Comparison

Cumulative

Term	Window	CBO forecast at start	Actual change	Prices above forecast	Per year
Biden	Q4 2020–Q4 2024 (16 quarters)	+9.09% (Feb 2021)	+21.25%	11.15%	2.68%
Trump II	Q4 2024–Q3 2026 (7 quarters)	+4.18% (Jan 2025)	+5.63%	1.39%	0.79%

Source. CBO (2021, 2025a); BLS. [CBO, 2021]

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Data Sources and Files

Where each dataset came from.

Table

Data Sources

Downloaded October 18, 2026

Dataset	Source	File
ITEP components and provisions	ITEP report, Figures 5–7	The-Impact-of-Key-Trump-Policies-on-Costs-and-Taxes-for-Americans.pdf
ITEP national and state shares	ITEP data download	US-and-state-estimates-download-for-Trump-Taxes-and-Costs.xlsx
CBO January 2025 forecast	US-CBO/cbo-data	quarterly_2025-01.csv
CBO February 2021 forecast	CBO Outlook, Table 2-1	56970-Outlook.pdf
CPI-U all items and less energy	BLS bulk files	cu.data series CUSR0000SA0, CUSR0000SA0LE

Source. See References.

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References

Citations follow APA 7th Edition format. All data were downloaded from the publishing organization. ITEP’s figures are reported as published; the comparisons and illustrations are the author’s calculations.

Institute on Taxation and Economic Policy. (2026a, October). Impact of key Trump policies on taxes and costs: National and state estimates [Report]. https://itep.org/impact-of-trump-policies-on-taxes-and-consumer-costs-2026/

Source of the graphic (Figure 3) and the component breakdowns used here (Figures 5–7). The PDF version is at https://itep.org/wp-content/uploads/The-Impact-of-Key-Trump-Policies-on-Costs-and-Taxes-for-Americans.pdf.

Institute on Taxation and Economic Policy. (2026b). U.S. and state estimates download for Trump taxes and costs [Data set]. https://www.itep.org/wp-content/uploads/US-and-state-estimates-download-for-Trump-Taxes-and-Costs.xlsx

National and 50-state results as shares of income; used for the share-of-income chart and the Texas table. Downloaded October 18, 2026.

Congressional Budget Office. (2021). The budget and economic outlook: 2021 to 2031. https://www.cbo.gov/system/files/2021-02/56970-Outlook.pdf

Table 2-1: CPI-U forecast, fourth quarter to fourth quarter, made at the start of the Biden term.

Congressional Budget Office. (2025a). Economic projections, January 2025 (quarterly) [Data set]. US-CBO/cbo-data. https://github.com/US-CBO/cbo-data

CBO’s official open-data repository; file data/economic/economic_projections/quarterly_2025-01.csv, variable cpiu. This is the forecast ITEP compares against.

Congressional Budget Office. (2025b, August 11). Distributional effects of changes in taxes and spending under Public Law 119-21. https://www.cbo.gov/system/files/2025-08/61367-Distributional-Effects.pdf

Full-law distribution including spending changes, 2026–2034 average; cited for context in Section 6.

Congressional Research Service. (2026a). Enhanced premium tax credit and 2026 exchange premiums (R48290). https://www.congress.gov/crs-product/R48290

Documents the 2021–2022 creation, the 2023–2025 extension, the January 1, 2026 sunset, and that P.L. 119-21 did not affect the expiration.

Congressional Research Service. (2026b). U.S. military operations against Iran (IN12662). https://www.congress.gov/crs-product/IN12662

Start date of the Iran war, February 28, 2026.

Congress.gov. (2021). H.R.1319 — American Rescue Plan Act of 2021: All actions. https://www.congress.gov/bill/117th-congress/house-bill/1319/all-actions

Senate passage 50–49 (March 6, 2021); House agreement 220–211 (March 10, 2021); signed March 11, 2021 (P.L. 117-2).

Congress.gov. (2022). H.R.5376 — Inflation Reduction Act of 2022: All actions. https://www.congress.gov/bill/117th-congress/house-bill/5376/all-actions

Senate passage 51–50 (August 7, 2022); House agreement 220–207 (August 12, 2022); signed August 16, 2022 (P.L. 117-169).

Congress.gov. (2025). H.R.1 — One Big Beautiful Bill Act: All actions. https://www.congress.gov/bill/119th-congress/house-bill/1/all-actions

Senate passage 51–50 (July 1, 2025); House agreement 218–214 (July 3, 2025); signed July 4, 2025 (P.L. 119-21).

Office of the Clerk, U.S. House of Representatives. (2021). Roll call 72, H.R. 1319. https://clerk.house.gov/Votes/202172

American Rescue Plan Act final House vote, 220–211, no Republican yeas.

Office of the Clerk, U.S. House of Representatives. (2022). Roll call 420, H.R. 5376. https://clerk.house.gov/Votes/2022420

Inflation Reduction Act final House vote: Democrats 220–0, Republicans 0–207.

Internal Revenue Service. (n.d.). Questions and answers on the premium tax credit. https://www.irs.gov/affordable-care-act/individuals-and-families/questions-and-answers-on-the-premium-tax-credit

Confirms the temporary 2021–2025 expansion and that the underlying credit continues.

U.S. Bureau of Labor Statistics. (2025). Consumer Expenditure Surveys, 2024: Table 1101. Quintiles of income before taxes [Data set]. https://www.bls.gov/cex/tables/calendar-year/mean-item-share-average-standard-error/cu-income-quintiles-before-taxes-2024.xlsx

Average annual expenditures and personal insurance and pensions by income quintile; used to put dollar values on the forecast gaps in Section 5.

U.S. Bureau of Labor Statistics. (2026a). Consumer Price Index for All Urban Consumers (CPI-U): bulk time-series files [Data set]. https://download.bls.gov/pub/time.series/cu/

CPI-U all items and all items less energy, seasonally adjusted, through September 2026. October 2025 was not published.

Minton, R., et al. (2026, April 8). Detecting tariff effects on consumer prices in real time, Part II (FEDS Notes). Board of Governors of the Federal Reserve System. https://www.federalreserve.gov/econres/notes/feds-notes/detecting-tariff-effects-on-consumer-prices-in-real-time-part-II-20260408.html

Estimates 2025 tariffs added about 0.8% to core PCE prices through February 2026.

About this analysis. Prepared by Will Campbell for Texas House District 109. ITEP figures are reported as published by ITEP; forecast comparisons, the energy decomposition, and the spending-based price costs are the author’s calculations from CBO and BLS data. They are not ITEP estimates and do not measure any one policy’s effect.