The U.S. economy is set to receive a significant boost this tax season as the One Big Beautiful Bill Act (OBBBA) drives a projected $65 billion surge in tax refunds compared with 2025, reports Baltimore Chronicle via Fortune. Analysts from Bank of America Global Research estimate that total consumer stimulus from the legislation will range between $135 billion and $140 billion, though the gains are expected to skew toward middle- and higher-income households.
Bank of America predicts that the average refund for 2026 could rise by $300 to $1,000 over last year, with a typical refund centering around $3,800. The new tax rules include deductions for tip and overtime income, which benefit service-sector workers, but the expansion of the state and local tax (SALT) deduction predominantly favors wealthier taxpayers. The Tax Policy Center notes that the largest cash benefits will accrue to high-income earners, highlighting persistent disparities in economic gains.
The widening “K-shaped” dynamic in the U.S. economy remains pronounced. Spending by higher-income households increased by 2.4% in late 2025 and early 2026, while lower-income households recorded only 0.4% growth. Senior U.S. economist Aditya Bhave warned that the consumer divide could deepen as a result of these fiscal measures. Data from the New York Federal Reserve indicates that this divergence has been evident for the past three years.
Higher-income households are more likely to save a significant portion of their tax refunds, often investing in stocks rather than spending on retail, meaning only about half of the stimulus may flow directly into the broader economy. Conversely, lower-income families tend to spend a larger share of their refunds, boosting purchases of goods, travel, and leisure activities in the weeks following receipt. This pattern could provide a temporary lift to discretionary spending from February through April, particularly as GDP growth slowed to 2.4% in the fourth quarter of 2025.
Despite the uneven distribution of benefits, the OBBBA offers a partial economic lifeline for lower-income households. Bank of America Institute research shows that refunds make up a higher proportion of monthly spending for these families, allowing them to increase consumption and alleviate pressure on discretionary budgets. Overall, while the legislation will provide a short-term boost to consumer spending, long-term economic momentum will continue to depend on labor market conditions.
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