Trump’s tax refund promises from the ‘Big Beautiful Bill’ are temporary, the ‘sugar high will be short lived’

President Trump is actively selling this year as “the largest tax refund season in U.S. history.” The White House is confident that the average refund could increase by about $1,000 thanks to the tax cuts passed in the administration’s signature legislation last summer. Trump is betting that the refunds will give the economy and the GOP a huge boost ahead of the November elections. 

This big lump sum isn’t an accident. The White House learned a huge lesson from the 2017 tax cuts. The IRS adjusted withholding tables, which meant voters only saw a small bump in each paycheck. Officials realized those benefits registered too late and were too small to sway voters before the 2018 midterms, where the GOP lost 41 seats. This time, they’ve played the long game, choosing a lump sum over a gradual distribution, to help Americans feel the growth.

While the checks are certainly exciting, there are concerns that the money will disappear because of inflation. Politico reported that economists and even many GOP strategists are cautioning that this benefit will be negated by the persistent cost-of-living problem that has plagued the economy recently. 

It is simple math

Diane Swonk, chief economist at KPMG U.S., warned, “The sugar high will be short-lived if [the refunds], in fact, go toward paying and supporting prices of things like additional health care costs, additional insurance costs, additional electricity costs, additional heating costs.” Swonk stressed that the real issue is that prices have gotten far out of line, and it takes a long time to catch up.

This makes the lump sum refund a huge political gamble. Strategists note that in our rapid-fire news cycle, a one-time refund payment could be long forgotten by November. GOP strategist Alex Conant compared the situation to an employer giving a bonus. Conant noted, “Any employer will tell you that when they give their employees a bonus, they get goodwill for a little bit, but six months later, the employees have forgotten about their bonus.”

Strategists also point out that one-time payments rarely reshape voters’ views of the economy on their own, with the COVID-19 stimulus checks only delivering temporary boosts to consumer sentiment. Another big concern is that the benefits aren’t reaching the people who need them the most. Many of the tax cuts are narrowly targeted. For many people, the biggest benefit comes only from a larger standard deduction. 

According to the nonpartisan Tax Foundation, very few low-income filers, who are feeling the biggest pinch from the affordability crisis, are actually expected to receive a refund check. In the meantime, the people have received promises of checks that haven’t shown up yet, and they are aware that the Big, Beautiful Bill has already benefited the rich. So, it remains to be seen if the refunds by themselves can make any difference.