US EditionRising Gas Prices May Offset Larger 2026 Tax Refunds for U.S. Households, Analysis Finds
Economists estimate that a $70 billion rise in gas costs will likely negate the $60 billion increase in 2026 tax refunds, limiting additional household spending power.
- 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.
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99 Articles
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Touted tax refunds clash with high gas prices
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 Trump's tax cut legislation. Yet spiking gas prices are on track to eat up those…
Trump touted bigger tax refunds, but higher gas prices are likely to eat them up
The large jump in tax refunds from President Donald Trump’s tax cut legislation was meant to boost the U.S. economy, but surging gas prices are on track to eat them up, leaving Americans with little extra to spend.
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