The Institute on Taxation and Economic Policy released a report on October 8, 2026, and the headline writes itself: everyone loses except the one percent. Shocking, I know. Did anyone actually expect the wealthiest Americans to eat a loss while the rest of us clip coupons?
The Poorest Get the Smallest Bill
Households in the bottom fifth will pay about seven hundred fifty bucks more this year. That sounds almost reasonable until you remember that seven hundred fifty dollars is a different universe of pain depending on your bank account. For a family already stretching every paycheck, that’s a month of groceries or a car repair they can’t afford.
The report measured three specific changes: new tax provisions in the One Big Beautiful Bill Act, the expiration of expanded Affordable Care Act tax credits, and price increases tied to tariffs, the Iran war, and immigration enforcement.
The Middle Class Takes It on the Chin
Middle-income households are looking at roughly seventeen hundred dollars in added costs. That breaks down into about eighteen fifty from price increases, two thirty from expiring health credits, and a small offset of three eighty in new tax savings. The math works out to seventeen hundred, which is the kind of number that makes you stare at your budget spreadsheet and wonder where the money is supposed to come from.
What do you even cut when everything costs more? ITEP compared actual prices against the Congressional Budget Office’s projected inflation path to isolate how much of the pain traces back to policy choices rather than ordinary economic drift. Turns out policy choices are expensive. Steve Wamhoff, ITEP’s federal tax policy director, put it plainly: the typical American in every group is worse off except the richest one percent.
The One Percent Actually Profits
The richest one percent faces about fifteen thousand nine hundred ninety dollars in extra costs from inflationary policies. But they also pull in roughly twenty-eight thousand five hundred fifty dollars in tax cuts from the One Big Beautiful Bill Act.
That leaves them twelve thousand five hundred sixty dollars ahead. Must be nice to have a net gain while everyone else gets a net loss. This is the part where I remind you that the report counts only new tax policies from 2025 and not the extension of the 2017 cuts, which critics say overstates the burden on everyone else.
Import Prices Are Doing Cardio
US import prices rose eight point one percent in the twelve months through September, the largest annual gain since July 2022. Prices jumped one point one percent in September alone after a zero point five percent rebound in August. That’s not a blip. That’s a trend with momentum. The September data covers the period before the Supreme Court’s February 2026 ruling struck down many of the tariffs, so the full effect of that decision has not yet shown up in the numbers.
Christopher Rupkey at FWDBONDS said Americans face an inflation threat on every front and everywhere they turn they have to reach into their pocketbooks. He also noted there was no import goods inflation before the second Trump administration’s policies started rolling out in January 2025. A Reuters/Ipsos poll of four thousand five hundred six adults found seventy-eight percent of Americans blame those policies for prices rising faster than incomes, with a margin of error of plus or minus two points. The public noticed before the economists did.
The Fed Has Nuance, and We Have Opinions
New York Fed research found that for every one percentage point increase in average tariffs, consumer goods prices rise about zero point two five percent after one year. About ninety percent of the 2025 tariffs passed through to US import prices, meaning foreign exporters barely lowered their prices at all. Tariffs added two point nine percentage points to goods inflation as of February 2026, and without them those goods prices would have fallen by nearly one percent.
Then the Supreme Court ruled on February 20, 2026, that the International Emergency Economic Powers Act does not authorize the president to impose tariffs. The decision struck down the drug trafficking tariffs against Mexico, Canada, and China along with the reciprocal tariffs against various countries. That’s good news, except it doesn’t undo the last year of higher prices. You can’t refund a grocery bill.
The White House Says Everything Is Fine
Spokesman Matthew Middleton disputed the findings and claimed Trump’s policies have addressed inflation. Sure. And my laundry is folded. Look, I’m not here to pretend ITEP is some neutral arbiter floating above the political fray. Some outlets describe it as left-leaning, and AEI’s Kyle Pomerleau argues that if you credit the 2017 extension to Trump, most income groups actually saw tax savings. ITEP’s Wamhoff counters that Americans experience the economy as it is, not as some counterfactual spreadsheet scenario. He’s right about that. You can’t pay rent with a counterfactual.
I’ll admit my view is simple. When the bottom fifth pays seven fifty more and the top one percent nets twelve thousand five hundred sixty in savings, the system is working exactly as designed. The design just happens to favor people who own yachts. This whole thing reminds me of the “Succession” episode where the family argues about money while the actual workers get nothing. Except this isn’t television. This is your grocery receipt.
What Happens Next Is Anyone’s Guess
The September import data shows pressure hasn’t eased, though it predates the Supreme Court ruling that killed many of the tariffs. The New York Fed says tariffs work through the economy over a drawn-out period, so the full cost to households may still be arriving like a late Amazon package you forgot you ordered. Future inflation reports and ITEP updates will show whether the gap between income groups narrows or widens.
My money is on widening. The wealthy have tax cuts, accountants, and patience. The rest of us have seventeen hundred dollars in new costs and a prayer. Maybe next year the report will surprise me. Probably not. But hey, at least the rich are comfortable while the economy sorts itself out.
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