In efforts to sell their Big Beautiful Bill, Republicans have focused more of their messaging on no tax on tips and overtime, but they may be missing their biggest opportunity to reach the most people with the standard deduction. The IRS says that about 90% of tax filers — 127 million according to the Treasury Department— use the standard deduction rather than itemizing. Comparing this number to the numbers of people that use the other new benefits, the standard deduction dwarfs the numbers of tax filers that take advantage of these other aspects of the bill. As David outlined in his new Roll Call column on the BBB, here are some startling comparisons:
• Last month, the Treasury Department announced that 29 million tax filers used the new overtime deduction.
• 7.5 million took the new tips deduction.
• More than 35 million seniors benefitted from the new Social Security deduction.
• But it was Treasury’s finding that, thanks to last year’s Big Beautiful Bill, the total standard deduction was protected for more than 127 million tax filers who did not see their standard deductions cut almost in half. This provision alone saved Americans almost triple the amount of the other three cuts combined based on the Treasury numbers.
Countering the Democratic claim that the tax bill gives tax breaks to the rich, 78% of those using the standard deduction earn under $100,000 and make up 70% of all those filing tax returns. Doubling the standard deduction was a clear benefit for middle- and lower-income taxpayers.
In a 3-minute segment from our podcast episode on the BBB: The Big Beautiful Bill’s Impact On The Standard Deduction For Taxpayers, we discussed our chart that shows a before and after comparison of what would have happened if the 2017 TCJA provisions had expired, allowing the doubled standard deduction to expire:
• According to the CBO January 2025 Tax Parameters report outlining what would happen if the current law reverted to the 2017 levels, the deduction for married couples would have gone from $30,000 down to $16,600 — a decrease of $13,400. That would have meant that they would pay taxes on an additional $13,400 of income.
• The deduction for single filers would have gone from $15,000 to $8,300 — a cut of $6,700. This means that all single filers would have had to pay taxes on an extra $6,700 of income.
With 127 million tax filers using the standard deduction, this is the aspect of the bill that is perhaps the GOP’s biggest opportunity to directly address concerns of the broadest swath of people.
