Myth vs. Fact: The Working Family Tax Cuts

In July 2025, Congress passed and President Trump signed into law the Working Families Tax Cuts. This historic legislation provides huge tax relief for working families and small businesses, secures the border, invests in our military, boosts rural hospitals, strengthens Medicaid and food assistance, and restores American energy dominance.

It really delivers monumental support for working-class families, while boosting our economy, homeland security, health care, and more. With so many pieces, it can be hard to keep track of what’s actually in the legislation and to separate truth from misinformation.

It’s time to set the record straight. Below are some of the most common myths about the Working Family Tax Cuts and the facts you should know about how this bill will benefit mid-Michigan families. Additionally, if you want to dive deeper into this legislation, make sure you check out my detailed explanation and a list of helpful resources.

MYTH: The Working Family Tax Cuts won’t benefit working-class or middle-class taxpayers.

FACT: The Working Family Tax Cuts will save working-class and middle-class families thousands of dollars each year.

This law delivers substantial tax relief to working families in Michigan and across the country. Specifically, by permanently extending the 2017 tax cuts for working- and middle-class taxpayers, this bill prevented the largest tax hike in history from hitting the wallets of hardworking people in 2026. This is saving the average Michigan taxpayer $2,151, while also expanding and creating additional tax relief, including:

• Raising the standard deduction.
• Eliminating tax on tips.
• Removing tax on overtime.
• Increasing the Child Tax Credit.
• Increasing the deduction for seniors on Social Security.
• Deducting tax on auto loan interest for American-made vehicles.

Altogether, these historic tax cuts will increase take-home pay for a typical Michigan family of four by up to $9,900.

MYTH: The Working Family Tax Cuts take away Medicaid and food assistance from vulnerable people.

FACT: The Working Family Tax Cuts law strengthens Medicaid and food assistance for Michiganders who rely on them by preventing fraud, waste, and abuse.

Medicaid and the Supplemental Nutrition Assistance Program are designed to help people with disabilities, expecting moms, children, and other vulnerable residents get the health care and food they need. This bill supports this goal by:

• Removing ineligible recipients, including illegal immigrants.
• Incentivizing states to reduce SNAP payment errors.
• Requiring able-bodied adults without young children to work, volunteer in the community, study, or take job training at least 80 hours a month if they receive Medicaid or food assistance.

These changes will strengthen Medicaid and food assistance programs, protect aid for people who need it most, and promote the dignity of work by encouraging able-bodied Medicaid recipients to enter the workforce or volunteer.

MYTH: The Working Family Tax Cuts hurt rural hospitals.

FACT: The Working Family Tax Cuts law makes historic investments in rural health care.

For far too long, failed and outdated policies have left many rural hospitals struggling to provide essential health care to people in remote areas. The Working Family Tax Cuts addresses this shortfall by investing in rural providers and putting them on a stronger footing to continue serving patients.

Specifically, the bill invests $50 billion into rural health care and creates the Rural Health Transformation Program. This groundbreaking program will deliver critical resources for rural hospitals, clinics, and health centers in a way that will encourage better health outcomes for rural patients and secure long-term financial stability for providers.

Learn more about this historic support for rural health care here.

MYTH: The Working Family Tax Cuts will interfere with Medicare and Social Security.

FACT: The Working Family Tax Cuts law does not touch Medicare while slashing taxes on Social Security benefits for seniors.

The Working Family Tax Cuts law does not make any changes to Medicare, the program that provides health coverage for seniors. Additionally, the only change to Social Security is that seniors can now deduct an additional $6,000 on their tax returns. As a result, 88% of seniors will pay no income tax on their Social Security benefits. This reduced tax burden will provide tremendous financial relief to retirees living on a fixed income.

MYTH: The Working Family Tax Cuts kill clean energy jobs.

FACT: The Working Family Tax Cuts law takes the government’s thumb off the scale and encourages market-driven energy innovation.

Competition in the free market encourages companies to make their products more efficient and affordable. But in the energy market, the federal government has overreached for far too long, picking winners and losers and stifling competition and innovation. This has resulted in skyrocketing prices for Michigan families. The reality is that the Biden administration launched handouts for wind and solar companies while intentionally attacking America’s oil and natural gas industries. The Working Family Tax Cuts law eliminates future unfair subsidies and cuts red tape to unleash American energy dominance, encourage competition, and spur innovation. This return to commonsense will drastically increase energy production and reduce costs across the board for mid-Michigan families, not just wealthy individuals who can afford electric vehicles and solar panels.