Trump's Tax Cuts vs. Inflation: How Rising Costs Are Shaping Midterm Voter Decisions

Evan Duke, a 30-year-old bartender in downtown Raleigh, North Carolina, smiled at the thought of no longer paying federal income tax on the hundreds of dollars in tips he earns during busy nights behind the bar at Pearl Peril. But the relief is short-lived. Duke, a registered independent, cannot afford health insurance and worries about the rising costs of rent, food, and fuel—expenses that are squeezing both him and his patrons who leave cash tips.

“It’s kind of messy right now,” Duke said.

His financial struggles reflect a broader economic tug-of-war during Donald Trump’s second presidency. While Trump’s tax cuts have aimed to put more money in the pockets of middle-class Americans, those benefits are being eroded by persistent inflation, particularly amid the ongoing conflict with Iran. The latest inflation data, released on Tuesday, showed the rate continuing to climb.

This economic tension is shaping voter decisions as the midterm elections approach, determining which party will control Congress for the final two years of Trump’s term.

North Carolina’s Senate Race: A Battle Over Economic Policy

The economic divide is playing out prominently in North Carolina’s U.S. Senate race. Republican nominee Michael Whatley, former state party chairman, is advocating for Trump’s tax overhaul, while Democratic candidate Roy Cooper, a former governor, criticizes Trump’s handling of the economy.

Duke, like many voters, remains undecided. “I’ve got to do more research,” he said. “I’ll decide based on how things are going at the time.”

Republicans Tout Tax Cuts as ‘Working Families’ Relief

The divide over Trump’s signature legislation—often called “the one big beautiful bill”—centers on its dual impact: tax cuts paired with reduced funding for public programs like Medicaid. During a recent campaign event in Rocky Mount with Vice President JD Vance, Whatley framed the midterms as a referendum on protecting policies such as no tax on tips, no tax on overtime, and no tax on Social Security.

While some of Whatley’s claims were exaggerated—such as the claim that overtime pay is entirely tax-free—the GOP’s messaging has consistently framed the legislation as a “working families tax cut.”

“I don’t know about you, but I sure trust you to spend your money better than a federal government in D.C.”

Tracy Brill, a 62-year-old Trump supporter in the audience, echoed this sentiment. Despite rising costs due to the war with Iran, she defended Trump’s economic approach. “The course he’s taken is spot on,” she said. “I believe the other presidents didn’t do what they should have done.”

Democrats Focus on ‘Affordability Crisis’

Democrats, led by Cooper, are framing the election around what they call an “affordability crisis.” Their pitch highlights several key issues:

• Rising health care costs and the GOP’s refusal to extend expanded Affordable Care Act subsidies.
• Soaring housing and utility prices.
• Increased costs of consumer goods due to Trump’s tariffs.
• Economic ripple effects from the Iran conflict, including higher fuel prices, increased fertilizer costs for farmers, and inflated grocery bills.

“It seems like everything that Washington is doing is driving up costs across the board,” Cooper argued.