The U.S. economy is gearing up for a substantial fiscal injection this tax season, with Bank of America Global Research analysts predicting a big increase in tax refunds driven by the One Big Beautiful Bill Act (OBBBA). While the law is set to give the economy a $65 billion shot over last year, analysts suggest the benefits will be unevenly distributed, potentially exacerbating the nation’s “K-shaped” economic divide.
According to BofA Global Research, tax refunds in 2026 are expected to be about $65 billion higher than in 2025 — an 18% year-over-year increase. The bank estimates that total consumer stimulus from the OBBBA will range from $135 billion to $140 billion. However, the structure of these tax breaks, particularly changes to state and local tax (SALT) deduction caps, suggests that middle- and high-income households will receive most of the benefits.
BofA’s analysis highlights a continuing “K-shaped” dynamic in the economy after 2025, where the financial fortunes of the wealthy differ sharply from those of low-income Americans. Between late 2025 and early 2026, spending by high-income households increased by 2.4%, while low-income households saw only a 0.4% increase.
Middle- and high-income households should be the biggest beneficiaries of the policy, according to senior US economist Aditya Bhave, who predicted that “K-shaped” spending dynamics could become “more pronounced”. An Economist’s Note from the New York Federal Reserve earlier this week found that evidence of a K-shaped economy now stretches back three years. “The consumer divide is deepening,” Bhave added.
While the bill includes deductions for tip and overtime earnings — which benefit service workers — it also raises the SALT deduction cap, a policy that disproportionately favors higher earners. The nonpartisan Tax Policy Center estimates that the law’s biggest cash impact will be on high-income earners.
Treasury and independent estimates now estimate that the typical 2026 return could be about $300 to $1,000 higher than last year, with some estimates centering around $3,800 on average.
The distribution of this stimulus has a significant impact on how money circulates in the economy. BofA noted that higher-income households are more likely to save than spend. As a result, almost half of this new stimulus will not reach the retail economy. Instead, unspent funds from wealthy recipients “are more likely to be used to buy stock than to pay down debt.”
