US EditionRising Gas Prices May Offset Larger 2026 Tax Refunds for U.S. Households, Analysis Finds
Higher gas prices driven by the U.S.-Iran conflict could erase the expected $60 billion boost from 2026 tax refunds, limiting extra spending for most U.S. households, economists say.
- On March 19, economists warned higher oil prices after the Iran war could offset the $748 average tax refund rise under the One Big, Beautiful Bill Act for U.S. households.
- As the war closed the Strait of Hormuz, halting 20% of global oil flows, Brent crude futures neared $112 and WTI crude futures hit $99.52, pushing the national average gas price to $3.88.
- Data from the Bank of America Institute show gas spending rose 14.4% in the week ended March 14, while Stanford's model estimates households will pay $740 more this year, nearly offsetting tax refunds.
- Lower- and middle-income households face heavier burdens as they spend nearly 4% of earnings on gas while receiving smaller refunds, and economists expect higher prices to worsen inflation and slow growth this year.
- Oxford Economics calculates that if gas averages $3.70 this year, consumers would spend about $70 billion, exceeding the $60 billion in increased refunds, while economists warn the rocket and feathers pricing dynamic could keep pump costs high.
102 Articles
102 Articles
Trump Promised Bigger Tax Refunds—But Rising Gas Prices Could Cancel Them Out
The promise sounded simple. Bigger tax refunds would put more money into American pockets. That, in turn, would lift spending and give the economy fresh momentum. For many households, it was meant to be a small but meaningful relief after years of rising costs. Yet, as spring unfolds, that promise is meeting a harsher reality. Fuel prices are climbing fast, and they threaten to absorb much of what those refunds were meant to deliver. A Boost Tha…
Spiking gas prices tied to Iran war are set to eat up tax refunds Trump touted
WASHINGTON — The U.S. economy was supposed to start the year with a bang, fueled by an unusually large jump in tax refunds from President Donald Trump’s tax cut legislation. Yet spiking gas prices are on track to eat up those refunds, leaving most Americans with little extra to spend. “Next spring is projected to be the largest tax refund season of all time,” Trump said in a prime-time speech in December that was intended to address voters’ conc…
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