Does ITEP's $1,700 figure mean middle-income pay fell?

A BBC review published October 20 separates a recorded income gain from a think-tank comparison. Median U.S. household income, adjusted for inflation, rose 2.6% in 2025 to $87,460, which the BBC called the highest on record. Inflation is 3.7%, compared with 3% in January 2025, when President Trump returned to office.

The Institute on Taxation and Economic Policy asked where households stand in 2026 after combining Trump's tax cuts, the end of extra health-insurance subsidies, and higher-than-expected prices linked to tariffs and the Iran war. ITEP estimates the middle fifth of households are about $1,700 worse off on average, and the poorest fifth about $750 worse off. It estimates the richest 1% are about $12,560 better off, mainly because of tax cuts. These are model-based comparisons, not measured paycheck cuts.

The BBC said the Tax Foundation's tariff estimates point in a broadly similar direction. Neither figure is a change in this week's grocery or fuel prices.

Does the $1,700 figure mean a middle-income household lost that much pay? No. ITEP's number is an average comparison with a scenario in which those tax, subsidy and price effects did not occur. It is not a recorded wage cut.