President Donald Trump is promising what he calls record-breaking tax refunds for Americans in the upcoming filing season, crediting the newly enacted One Big Beautiful Bill Act (OBBBA) for what he says will be an unprecedented boost.
Speaking at a Cabinet meeting this week, Trump said the law — which extends tax cuts from his first term while adding new reforms and spending measures — will translate into larger refunds for millions of filers.
“Next year’s projected to be the largest tax refund season ever,” Trump said.
Treasury Secretary Touts Retroactive Tax Relief
Treasury Secretary Scott Bessent reinforced that message, emphasizing that several OBBBA provisions will apply retroactively to 2025 and are designed to deliver meaningful financial relief.
“The best is yet to come,” Bessent said, adding that “in 2026 we are going to see very substantial tax refunds in the first quarter.”
He pointed to targeted benefits including:
- Tax breaks for Social Security recipients
- Relief for workers who depend on tips and overtime
- New deductions linked to auto loans for U.S.-manufactured vehicles
According to Bessent, these measures are intended to help counter rising living costs.
White House Promotes ‘Tariff Dividend’ Concept
Trump also renewed his push for what he calls “tariff dividends” — payments to Americans funded by federal tariff revenue, with the remainder used to pay down the national debt.
“We’re going to be giving back refunds out of the tariffs because we’ve taken in literally trillions of dollars,” Trump said, suggesting that tariff income could eventually make income taxes optional or significantly lower.
He has previously floated the idea of $2,000 annual tariff dividends for low- and middle-income households. Such payments would need congressional approval, and administration officials have discussed a potential launch in mid-2026.
Experts Question Long-Term Fiscal Consequences
Budget analysts, however, are doubtful that the numbers add up. The Committee for a Responsible Federal Budget (CRFB) estimates that a $2,000 yearly tariff dividend, modeled on pandemic-era stimulus checks, would cost around $600 billion a year.
By contrast, the administration’s tariffs are projected to raise about $300 billion annually, including those still under review by the Supreme Court. Net tariff revenue not affected by that litigation is under $100 billion per year.
Based on CRFB’s calculations, sending out $2,000 dividends every year for a decade would add roughly $6 trillion to the national debt — about twice the revenue the tariffs are expected to generate over that same period.
Tariffs Still a Small Slice of Federal Revenue
Despite the administration’s focus on tariffs to support the dividend pitch, customs duties remain a relatively minor component of federal tax collections.
In fiscal year 2025:
- Individual income taxes brought in more than $2.6 trillion
- Payroll taxes totaled $1.7 trillion
- Corporate income taxes contributed $452 billion
Customs duties, including tariffs, generated just $195 billion — about 3.7% of total federal tax receipts, according to FOX Business.
The White House argues that the OBBBA will spur wage growth, strengthen the broader economy, and improve affordability for families. Whether the forecast “record” refunds materialize will become clear when the 2026 tax filing season gets underway.
