Surging U.S. gas prices could erase bigger tax refunds, analysis finds
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Higher U.S. gasoline prices stemming from the Iran war could effectively wipe out the fatter tax refunds many Americans are expected to collect this year, a new analysis found. Edited by Alain Sherter In:
Higher U.S. gasoline prices stemming from the Iran war could effectively wipe out the fatter tax refunds many Americans are expected to collect this year, a new analysis found.
Economists from the Stanford Institute for Economic Policy Research (SIEPR) estimate that the average U.S. household will spend an additional $740 on gas this year because of the jump in global oil prices following the attack on Iran. If that estimate holds true, it would gobble up nearly all of the additional money people are slated to collect in tax refunds this year, according to the research.
The nonpartisan Tax Foundation estimates that the average individual tax refund will be $748 higher this year because of new cuts provided under the Republican-backed "one, big, beautiful bill act" (OBBBA), signed into law last year by President Trump.
As of earlier this month, overall tax refunds were averaging $3,676, up 11% from the same point last year, according to the IRS.
To be sure, the eventual pocketbook hit from higher U.S. energy prices depends on how long the conflict in Iran persists and, more specifically, how long the strategic Strait of Hormuz remains effectively blocked to the tankers ferrying oil and liquid natural gas to global markets.
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