This Tax Day could have looked a lot different

For most Americans expecting significant refunds, this Tax Day could have gone very differently if Congress hadn’t extended key tax cuts.

The 2017 tax law was scheduled to expire at the end of last year, and the average family would have seen a $1,500 tax hike, hitting middle-class families the hardest.

Think about a family of four, with each parent earning about $75,000 a year, opening their tax return and seeing a much smaller refund or even a bill they weren’t expecting.

Instead of getting money back and saving for a large purchase or paying off debt, they’re looking at their budget to figure out where they can cut. Groceries. The kids’ after-school activities. Even needed home repairs.

The effect lingers far beyond April. It shapes the rest of the year for families and small businesses.

That means:

• Less room to save for emergencies
• Fewer options when unexpected costs hit
• More hesitation about big decisions
• Budget cuts and constraints on investment or growth

Over a year, these cuts add up. They lead to more stress, less saving, less spending, and less growth.

What families are seeing instead

That’s not what many families are seeing this year.

For the same household, the outcome looks different. Instead of bracing for a bill, they’re likely seeing a meaningful refund — an average of $3,700. That’s money back in their budgets to spend on their families and communities.

Families and small businesses will be able to save for the future, expand their operations, and invest more locally.

Washington had a choice

It’s important to remember that middle-class families almost had a much higher tax bill this year.

The standard deduction, which was nearly doubled under the law, would have also dropped. Today, that deduction is $31,500 for married couples filing jointly, significantly lowering taxable income for average families.

Small businesses were set to be hit hard as well, as business owners typically can’t invest in future growth if they are bracing for a heavy tax bill.  

If Congress didn’t pass the Working Families Tax Cuts, Americans would have seen less take-home pay through the year, smaller or nonexistent refunds, and higher taxes on small businesses.

So remember, when families see a higher refund this year, that it didn’t happen by accident. It reflects a decision by Congress to extend key parts of the tax code that benefit everyday Americans and make the American Dream more accessible.

What comes next

This moment also raises a larger question.

What kind of system do we want going forward? One that makes it harder to get ahead — or one that makes it easier to build, save, and plan?

At Americans for Prosperity, we support an affordability agenda built around a simple idea: If Americans need more of something, it should be easier to produce it.

More housing means lower rents. American energy abundance means lower energy bills. More competition means better prices and more choice in health care.

That means removing barriers that slow down building, delay investment, and raise costs over time. It means making it easier — not harder — for families to move forward.

If you want to learn more about the policies that can help lower costs and expand opportunity, explore AFP’s Affordability Agenda for America and find out how you can get involved.