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Marisa Lagos: From KQED, welcome to Forum. I’m Marisa Lagos, in for Alexis Madrigal. For many of us, the painful ritual of filing our federal income taxes sometimes comes with a bit of a reward. If we’ve paid the government more than we owe, we get a refund that might go toward a splurge or something we really need. And this year, many taxpayers have been expecting even larger refunds than usual. That’s because President Trump’s major policy bill included campaign promises like cutting taxes on tips and overtime.
It turns out, though, that while some Americans have seen bigger refunds this year, they haven’t quite lived up to those promises. To understand why, we’re joined this hour by Shannon Pettypiece, a reporter with NBC News who’s been investigating how the new tax breaks have played out for Americans. Later in the hour, we’ll be joined by Karen Brosi, a licensed tax professional in Palo Alto, who will answer your questions about taxes.
But first, Shannon Pettypiece, welcome to Forum.
Shannon Pettypiece: Thanks. Good to be here.
Marisa Lagos: I’m happy to have you. As I mentioned, you’ve been talking to real people about this. But first, let’s step back and get a lay of the land. When Trump was first in office, he passed a major tax cut bill in 2017. My understanding is that much of last year’s bill made those cuts permanent, but also went a bit further. Can you walk us through who benefited from the 2017 tax cuts, and whether that changed with this new policy bill?
Shannon Pettypiece: Right, and that’s a good point. A lot of what was done last year was extending that 2017 tax law, which delivered tax cuts across the board, but included especially large cuts for corporations. Those were extended.
Then, as you mentioned, during the 2024 campaign, some of Trump’s key promises were no tax on tips, no tax on overtime, and no tax on Social Security. That message resonated in places like Nevada, where there are many tipped workers, and with working-class voters who rely on overtime—whether in manufacturing, construction, or public safety.
These were central campaign promises, and they were included in the tax bill. As far as legislation goes, this is the main policy achievement of Trump’s presidency so far—and depending on what happens in the next election, it could remain the biggest one.
I wanted to follow up with people who were supposed to benefit—waitresses, manufacturing workers, seniors—to see how things actually played out. When I dug into the law, it turns out there are benefits, but also caveats, limitations, and exclusions. As people have filed their taxes, many are realizing these provisions aren’t quite what they expected.
Marisa Lagos: I want to get into those details in a moment. But first, critics often say that Republican tax policies tend to benefit the wealthiest Americans the most. Is that true here? What kind of income would you need to see meaningful benefits from last year’s bill?
Shannon Pettypiece: There have been several analyses. One from the Tax Policy Center found that about 60% of the savings go to the top fifth of households. So yes, the benefits are disproportionately going to wealthier households.
Part of that is because higher-income households pay more in taxes to begin with. Lower-income households may pay very little or no federal income tax, so their potential savings are smaller. On the higher end, the benefits are larger.
Then there’s the ultra-wealthy—multimillionaires and billionaires—who can see savings in the hundreds of thousands or even millions of dollars. That comes from provisions like estate tax changes or deductions for things like private jets.
Marisa Lagos: Shannon, who among us doesn’t have a private jet to deduct, right?
Shannon Pettypiece: Exactly. These are the kinds of provisions that can generate massive savings for a small number of people—far beyond the couple thousand dollars a typical worker might see.
Marisa Lagos: And that also means the biggest cost of this bill comes from those high-end tax cuts—for wealthy individuals and businesses, right?
Shannon Pettypiece: That’s right.
Marisa Lagos: We have a listener comment from Rick, who writes: “As a person with a disability, my guess is the new tax provisions won’t deliver big refunds for disabled people.” Is that fair? If you’re on a fixed income and already paying little in taxes, you probably won’t see much change?
Shannon Pettypiece: Generally, yes—though every situation is different. For example, many people who rely primarily on Social Security weren’t paying federal income tax to begin with because their income is low. So even though the president has said there’s “no tax on Social Security,” that doesn’t translate into a benefit for those individuals.
There is a $6,000 deduction for seniors, but again, if your income is already low, that may not make a difference. Similarly, people on disability income may not see much benefit.
At the same time, there could be new requirements tied to programs like food stamps or Medicaid. While many people with disabilities are exempt, there may still be additional paperwork or compliance requirements tied to changes meant to offset the cost of these tax cuts.
Marisa Lagos: We’re talking with Shannon Pettypiece, senior policy reporter at NBC News Digital. We want to hear from you. If you’ve filed your taxes, were there any surprises? Did you get the refund you expected? If you’re getting a refund, will it make a difference for your household?
Call us at 866-733-6786. That’s 866-733-6786. You can also email forum@kqed.org or reach us on social media at KQED Forum.
Shannon, to put this in perspective: haven’t these kinds of outcomes—where higher earners benefit more—been typical in the U.S. tax system for decades?
Shannon Pettypiece: Yes, that’s a fair point. This system has developed over decades, going back to the 1980s, with layers of tax policy changes that many argue give advantages to wealthier households.
For example, the ultra-wealthy often earn income through investments rather than wages, and investment income is often taxed at lower rates. There are also strategies like using losses to offset gains or making charitable donations to reduce taxable income.
All of this contributes to a system where some of the wealthiest individuals and corporations pay relatively little in taxes.
Marisa Lagos: Let’s return to Social Security. A listener asks: Do people living on Social Security get a tax break or bigger refund under this bill?
Shannon Pettypiece: It mostly benefits people with additional income beyond Social Security. For example, someone with a household income around $140,000—including Social Security, a pension, and other sources—might benefit from the $6,000 deduction. That reduces their taxable income, which could lower their tax bill or even result in a refund.
But if your only income is Social Security, you likely weren’t paying federal income tax anyway, so you won’t see much change.
Marisa Lagos: Do we know how many people actually benefit from that deduction?
Shannon Pettypiece: It can be significant for people in a certain income range—roughly $75,000 to $150,000. Advocacy groups like AARP say those individuals can see meaningful benefits.
But if you earn more than that, the benefit phases out. And if you earn less, you may not have owed taxes in the first place. So it’s not a universal benefit, despite how it’s sometimes described.
Marisa Lagos: Like everything with the tax code, it’s complicated. That’s why we’re talking with Shannon Pettypiece of NBC News. After a short break, we’ll bring in Karen Brosi, a tax preparer and certified financial planner in Silicon Valley.
We’re here to take your tax questions—keeping in mind that everyone’s situation is different. If you’ve filed your taxes, did anything surprise you? Did you get the refund you expected? Is it making a difference in your finances amid rising costs?
Call us at 866-733-6786. That’s 866-733-6786. Or email forum@kqed.org.
We’ll be right back.
