By Faith Barbara N Ruhinda at 1359 EAT on Saturday 23 August 2025

U.S. Vice President J.D. Vance began a national tour on August 21 to promote President Donald Trump’s major legislative achievement—the One Big Beautiful Bill Act, a sweeping tax and spending measure.

The law makes permanent the tax cuts originally enacted in Trump’s 2017 legislation, which were set to expire at the end of 2025 without congressional action. It also introduces new tax breaks, including exemptions for tips, overtime income, and Americans aged 65 and older.

Speaking in Peachtree City, just outside Atlanta, Vice President J.D. Vance declared, “We had the biggest tax cut for families that this country has ever seen,” while promoting President Donald Trump’s One Big Beautiful Bill Act.

While the 2025 tax law includes substantial provisions, Vance’s claim echoes a frequent—but inaccurate—talking point from Trump, who has long described his 2017 tax law as the largest cut in U.S. history. In reality, the 2025 law ranks as either the third-largest since 1980 or is tied for seventh place, depending on the measurement used.

Because the legislation primarily extends tax cuts from 2017 that were set to expire at the end of 2025, many Americans are likely to see only modest changes in their tax bills starting in 2026.

The White House did not respond to a request for comment before publication.

We analyzed tax revenue reductions from major legislation enacted since 1980. (Most federal tax laws prior to that period either raised taxes or made only modest cuts.)

To account for inflation and economic growth, we measured the size of each tax cut as a percentage of gross domestic product (GDP), which provides a consistent basis for comparison over time. Additionally, because detailed revenue data for some earlier laws is only available for their initial years, we compared each law based on the cumulative tax savings it generated during its first five years in effect.

Our analysis found that the largest tax cut in recent history came from the 1981 legislation passed by a Democratic-controlled Congress and signed into law by President Ronald Reagan, who campaigned on a promise of sweeping tax reductions. That law reduced tax revenue by an amount equal to 3.5% of the nation’s cumulative GDP over its first five years.

The second-largest tax cut came from a 2012 bill passed by a Republican-controlled Congress and signed by President Barack Obama. That legislation, which extended tax reductions first enacted in 2003 under President George W. Bush, amounted to 1.7% of GDP over five years.

Based on current projections, President Trump’s 2025 tax law ranks third, with tax reductions totaling 1.4% of GDP when combined with the extended provisions from his 2017 tax cuts.

Trump’s original 2017 law ranks fourth, at 1% of GDP—tied with a 2010 law signed by Obama that extended Bush’s 2001 tax cuts. Bush’s 2001 and 2003 tax laws rank sixth and seventh, respectively, with reductions equal to 0.7% and 0.5% of GDP.

If only the new provisions in the 2025 law are counted—excluding the reauthorization of the 2017 cuts—its impact would drop to 0.5% of GDP, tying it for seventh place.

Joseph Rosenberg, a senior fellow at the Urban-Brookings Tax Policy Center, said it is legitimate to measure the scale of the 2025 tax law either by including or excluding the extended 2017 provisions, depending on the analytical context.

There may be a gap between the historic scale of President Trump’s 2025 tax law and the real-world impact many Americans will notice when filing their 2026 taxes.

Because the law primarily extends the lower tax rates first enacted in 2017, most Americans are already experiencing its core benefits—and won’t see a dramatic drop in their tax bills.

“For most families, they are going to see a child tax credit that increases by a maximum of $200 per child, from $2,000 to $2,200,” said Margot Crandall-Hollick, a principal research associate at the Urban-Brookings Tax Policy Center. “Some are going to pay a little less because of the tips and overtime provisions and a slightly higher standard deduction.”

The law makes permanent a more generous standard deduction that had been set to expire and increases it slightly—to $15,750 for single filers and $31,500 for joint filers in 2025—with future adjustments tied to inflation.

However, Crandall-Hollick noted that not all households will benefit. Some lower-income families may see their tax bills increase due to the expiration of expanded health insurance premium tax credits, which were not renewed under the One Big Beautiful Bill Act.

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