The 2026 Refund Surge
Appearing on the popular business and tech program The All-In Podcast, the 63-year-old Bessent provided a bullish outlook for the upcoming tax season. With the tax cuts from President Trump’s “Big Beautiful Bill” now fully in effect for the 2025-26 financial cycle, the disconnect between tax rates and payroll withholdings is expected to benefit taxpayers.
- The Withholding Factor: Bessent noted that while tax rates have dropped, most “working Americans” have not adjusted their payroll withholdings.
- The Prediction: This inertia is set to result in overpayment throughout the year, leading to a massive reconciliation in the first quarter of 2026.
- The Amount: Bessent estimated that average working families could see refunds as high as $2,000 this year.
“I can see that we’re gonna have a gigantic refund year in the first quarter… because the working Americans do not change their withholdings,” Bessent stated during the interview.
Bessent Slams the Fed as an “Engine of Inequality”
Beyond tax season, Bessent used his platform to echo President Trump’s long-standing criticisms of the U.S. Federal Reserve and its Chair, Jerome Powell.
Bessent defended his controversial characterization of the Fed as an “engine of inequality,” arguing that the central bank’s recent monetary policies have widened the gap between the wealthy and the working class.
- The Critique of QE: While acknowledging the Fed’s role in stabilizing markets during the COVID-19 pandemic, Bessent criticized the continuation of Quantitative Easing (QE) into early 2023.
- Interest Rate Stance: He suggested that the Fed’s reluctance to lower interest rates faster—a point of frequent contention for the Trump administration—is exacerbating economic disparity.
- The Mandate Argument: Bessent clarified that while economic equality isn’t a formal mandate of the Fed, the institution has a responsibility not to make inequality worse through prolonged market interventions.
What This Means for Taxpayers
The IRS is expected to begin accepting 2025 tax returns in late January 2026. Financial experts advise that while a $2,000 refund acts as a “forced savings account,” taxpayers who prefer more immediate liquidity may want to update their W-4 forms with their employers to reflect the current lower tax rates.