Who is benefiting the most from the Trump administration's tax cuts

[0:00] tax day the deadline for filing your taxes is tomorrow and the president and republican [0:05] lawmakers are trying to draw voters attention to new tax cuts and increased deductions approved [0:11] last year in the so-called one big beautiful act but with the war higher prices for gas and other [0:17] economic costs some polls suggest many americans don't feel they're benefiting much from the new [0:23] law stephanie sai gets some detail now on what's changed um now one of the main things the new law [0:30] did was keep in place many tax cuts established back in 2017 that were due to expire but it also [0:37] included some significant changes including a boost in the standard deduction to 31 500 for married [0:45] couples filing jointly and 15 750 for single filers a new senior bonus deduction for people 65 and older [0:55] worth up to six thousand dollars a person a big jump in the deduction for state and local taxes [1:02] known as salt that's back up to a cap of forty thousand dollars new limits on taxes on tips [1:09] capped at a deduction of twenty five thousand dollars as well as new deductions for overtime [1:15] eligible workers can now deduct up to twelve thousand five hundred dollars of overtime pay [1:21] to help walk us through some of these changes i'm joined now by andrew durin who covers tax policy for [1:26] the new york times andrew let's just jump right in because there's a lot some of these policies really [1:32] do seem significant the senior bonus the raising of the salt deduction but i also understand from [1:37] reading your reporting that there are limitations on how much the average taxpayer may benefit so who [1:43] really stands to gain the most from these changes and who might not get the impact that they're expecting [1:49] to get in their refund yes so it's a great question um i think one of the main things obviously these [1:55] tax cuts depend on uh whether you're eligible for them in the first place so something like the senior [2:02] deduction for example only people who are 65 and older will be able to benefit from that but more broadly [2:08] across all of these tax cuts the the biggest winners are going to be people who have made enough money [2:13] uh to have income and therefore taxes to cut in the first place uh all of these changes are structured [2:21] as deductions which means that people who already make below the standard deduction or who do not have [2:28] any taxable income to begin with uh these are you know the lowest of uh low-income americans they uh won't [2:35] gain anything from these tax cuts because they uh don't pay any federal income taxes to begin with [2:40] um so yeah there are lots of specific rules for all these tax cuts it depends on obviously if you earn [2:45] tips or work overtime but uh in general uh you need to have taxable income uh to be able to benefit from [2:52] them and we're going to get into some of those details in a moment but in general andrew on average [2:58] are people going to see bigger refund checks this year than they did in years prior yeah so so far um [3:05] again despite all of the the the ins and outs and the rules uh the average refund so far this year [3:10] has been larger than in the past uh the average size the average refund is about 11 bigger this [3:16] year compared to last year and that does reflect uh these changes that republicans made last year so [3:22] again you know there are rules um and there are uh restrictions on these tax cuts but for the people [3:27] who do qualify um they are still seeing in some cases potentially significant tax savings as a result and [3:33] so it's a it's a mixed landscape there are definitely it's it's uneven in terms of some [3:38] people may be seeing big savings some people may not be seeing anything um but uh overall the average [3:44] has uh the average refund has gone up how much are these potentially bigger refund checks being offset by [3:51] other rising costs we see higher gas prices right now there have been cuts to welfare programs and [3:57] higher medical insurance what is your reporting telling us about the importance of these tax cuts in [4:03] relation to other parts of trump's economic agenda yes so certainly um they are just a piece of things [4:09] and there are other costs that are going up you much gap you mentioned gas prices there are also [4:14] higher costs across the economy in part because of the tariffs that president trump has imposed [4:21] over the course of his administration there have been some studies and some estimates from economists that [4:26] the total amount of economic relief or or dollars that go into the economy from uh this tax season are [4:34] roughly uh the same as the extra costs that are being imposed by higher gas prices uh since the war in [4:42] iran uh started and so overall there might be kind of a net net uh no change basically in terms of stimulus to [4:50] the economy but for you know individual americans uh it will depend on their situation so for folks who got [4:56] particularly big tax refunds they may kind of come out on the positive for folks who don't drive much [5:01] you know maybe uh higher gas prices are not as significant but um you know then there will be [5:06] people who maybe do drive a lot and maybe didn't see any much change on their taxes and this could be [5:11] overall a negative for them well a lot of the people we're talking about this tax season is people [5:16] who receive tips that has received a lot of attention trump's policy on supposedly tax-free tips that of [5:24] course reached a fever pitch yesterday when the president received a special door dash delivery [5:29] at the white house let's replay that the reason for this is the fact that i heard you picked up an [5:36] extra 11 000 that you didn't get because the tax bill was so big the refund was the biggest you've ever [5:42] had is that a correct say it it definitely was yeah i i saved over 11 000 by not having the claim [5:52] was that surprising to you actually it was very surprising sharon simmons there the so-called door [5:58] dash grandma andrew she's receiving a lot of attention for what she did and did not say in that [6:03] exchange which was clearly staged but let's focus on those tax deductions for tips and i should say by the [6:10] the way simmons clarified in an interview i heard today that she makes eleven thousand dollars in [6:16] tips a year that's not the amount she's claiming to have saved in taxes but andrew what should we know [6:21] about this policy and is it what the president is billing it as right so i guess first off i mean [6:28] definitely this policy could uh result in significant tax savings for people like uh the door dash grandma who [6:36] uh you know much of their earnings takes the form of tips for them um they might be able to save you [6:42] know if you if you are if you have eleven thousand dollars in tips i mean that could still translate [6:47] into several thousand dollars in tax savings kind of depending on the rest of your tax situation that [6:52] said you know there are um you know there are some things about this tax break that aren't what they [6:57] seem i mean president trump has called it no tax on tips but that's not really uh the policy that republicans [7:03] passed so even uh for people who can claim this tax break they will still be paying taxes on their [7:09] tips they'll still owe uh payroll taxes on their tips they may still owe uh state income taxes on their [7:15] tips and so it's not a complete uh and total exemption from taxes the way that president trump likes to [7:21] describe it but it could still and can still result in significant tax savings for the people who are [7:28] able to deduct their tips okay we'll have to leave it there that is andrew duran with the new york times [7:33] thank you thanks for having me support journalism you trust support pbs news donate now or even 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