Higher tax refunds will likely be used to offset rising gas prices
AP News • • general
Key Points:
- The anticipated boost to the U.S. economy from large tax refunds due to Trump's tax cuts is being undermined by soaring gas prices following the Iran war, which began on February 28.
- Gas prices have surged to an average of $3.94 per gallon, with forecasts suggesting they could peak at $4.36 in May, potentially costing the average household an additional $740 annually—nearly offsetting the expected $748 increase in tax refunds.
- Lower and middle-income households are disproportionately affected, as they spend a higher share of their income on gas and receive smaller tax refunds, exacerbating economic inequality.
- Despite continued consumer spending resilience, elevated gas prices are expected to slow economic growth to around 1.9% in
