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Rising Gas Prices May Offset Larger 2026 Tax Refunds for U.S. Households, Analysis Finds
Rising gasoline prices linked to the U.S.-Iran war could cost the average household $740, nearly matching the $748 expected increase in 2026 tax refunds, analysts 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.
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Bigger tax refund this year? You'll likely spend it at the gas pump, data shows
“The longer these gasoline prices persist, the more that will gradually sap consumer discretionary spending,” said David Tinsley, senior economist at the Bank of America Institute.
'Almost exactly offsetting the boost': Higher gasoline prices this year could wipe out tax refunds from Trump's One Big Beautiful Bill Act
In January, the White House celebrated what they claimed to be the “largest tax refund season in U.S. history,” promising hundreds of dollars more in refunds this tax year as a result of changes to the tax code, thanks to the One Big Beautiful Bill Act (OBBBA). But economists warn those savings could go up in smoke—or rather exhaust, cancelled out completely by elevated gas prices as a result of the ongoing war in Iran. An analysis led by econo…
·New York, United States
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Total News Sources73
Leaning Left17Leaning Right3Center34Last UpdatedBias Distribution63% Center
Bias Distribution
- 63% of the sources are Center
63% Center
L 31%
C 63%
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