This Tax-Refund Bonanza Won’t Do What Bessent Says It Will

Americans are getting bigger-than-usual tax refunds this year. Treasury Secretary Scott Bessent has been talking up this windfall for months, saying that it will help spark “a non-inflationary boom.”

That’s unlikely. First, the estimated $90 billion to $100 billion increase in refunds, a result of several provisions of the budget law enacted last year, amounts to only about 0.3% of annual gross domestic product. Second, it’s hard for a tax refund to find its way into the pockets of those most likely to spend it — which is to say, lower-income Americans — because they don’t pay much in the way of federal income taxes to begin with.