White House hails this year’s record tax refunds for Americans

The White House spent Tax Day arguing that record tax refunds have boosted the U.S. economy. But it may not be enough to offset the setbacks from higher energy prices due to the Iran war.

A record number of taxpayers received a refund this year with an average refund of $3,400, according to the White House. That represents an 11% increase over the average refund amount from 2025.

Roughly 45% of tax filers, or 53 million, claimed one or more of the tax cut provisions in President Trump’s One Big Beautiful Bill Act, which he signed into law last year.

More than 6 million Americans claimed the new no-tax-on-tips exception, with an average deduction of $7,100. Another 25 million Americans used the new no-tax-on-overtime exception with an average deduction of $3,100. More than 30 million older adults claimed an enhanced average deduction of $7,500. More than 1 million filers claimed no tax on car loan interest with an average deduction of over $1,800.

“This has been an incredible tax season,” Treasury Secretary Scott Bessent told reporters at the White House.

Mr. Bessent said the tax refunds are “bringing prosperity back to Main Street and that starts with people keeping more of their money.”

Despite Americans getting money returned to their pockets, consumer spending has been sluggish for essentially the whole year. It was flat in January and grew about 0.1% higher in February.

However, there are some signs that consumer spending revved up in March because of the record increase in tax refunds that could bolster first-quarter gross domestic product and push a spending surge into the summer.

For example, Bank of America this week published data showing a 4.3% increase in credit and debit card spending, the largest percentage since 2023. That suggests that taxpayers are spending their refunds rather than holding on to them.

But increased gasoline prices threaten to overshadow and perhaps reduce that spending. The average gas price on Tuesday is $4.11 per gallon, nearly a dollar more than it was at the same time last year, according to the automobile group AAA.

GasBuddy, a website that tracks consumer spending on gas, estimates that the Iran war has already cost U.S. consumers more than $19 billion in additional fuel costs.

When asked if the tax cuts were enough to offset the rising gas costs, Mr. Bessent demurred.

“No one’s ever objected to more money in their pocket. So Americans have more money and they can decide how they want to spend it,” he said.

Democrats have pounced on the rising gas prices, saying it obscures the tax refunds.

“The American people are seeing their costs increase,” said House Democratic Caucus Chair Pete Aguilar, California Democrat. “Even if they get a tiny bit of relief filing their taxes, every month they are paying more. Housing costs, utility costs, gas costs — all of those costs continue to go up.”

Recent polls show that the American people are still sour on the economy. A YouGov poll released this week found that 19% of respondents thought the economy was improving and 59% thought it was getting worse. At the start of Mr. Trump’s second term, the same poll found that 21% of voters thought the economy was improving and 37% thought it was getting worse.