The Pessimists Are Wrong: Fox News Tax Expert Says Big Refunds Signal a Strong Economy

Many Americans are feeling bearish about the economy, with May's Economic Confidence Index hitting the lowest level since 2022. While the numbers have rebounded slightly to -39 in August from -45 in May, consumer confidence remains low. However, some Americans are more optimistic than others, and Julio Gonzalez, founder of Engineered Tax Services, is one of them.

Optimism in the Face of Economic Uncertainty

Gonzalez wrote in a September 3 Fox News op-ed that "the pessimists are wrong, and the numbers prove it." He cited the One Big Beautiful Bill Act (OBBBA), signed into law by President Trump in 2025, as a key contributor to strong economic growth. The OBBBA allowed companies to write off more investments upfront, including the permanent restoration of the 100% first-year depreciation deduction and a higher Section 179 deduction limit.

According to Gonzalez, these changes have led to increased business investment and a $43 billion increase in IRS tax refunds in the 2026 tax filing season. "Anyone still calling this economy weak isn't paying attention to the right indicators," he wrote.

Supporting Data: Business Expansion and Hiring Increases

While some may argue that large IRS refunds are not necessarily a sign of a strong economy, data supports Gonzalez's view of the economy. Employers are planning hiring increases in the second half of the year, and U.S. business activity in August surged to the highest level in 52 months.

However, it's essential to consider that large refunds may also have worsened inflation by providing an additional influx of cash for many families all at once, driving up demand. Additionally, many of the tax breaks driving these refunds for individuals are also temporary and expected to expire in 2028.

Why Big Tax Refunds May Not Be the Only Indicator of a Strong Economy

Some economists describe the current economic state as a K-shaped economy, with different parts of the economy moving in opposite directions. While wealthy households are thriving, low-income groups are struggling. Large tax refund checks may have also exacerbated income inequality by providing a larger share of the pie to high-income earners.

Furthermore, the AI boom and large capital investments in data centers account for a significant share of the increase in business investment. This highlights the importance of considering multiple indicators when evaluating the state of the economy.

What to Watch Next: A Precise Approach to Tax Planning

Regardless of whether one believes big tax refunds are a sign of an economic boom, it's clear that the OBBBA resulted in larger refunds in 2026 and will likely do so again in the upcoming filing season. With many key deductions remaining in effect until 2028, including a $6,000 senior deduction for eligible Americans 65 and over, it's essential to take a precise approach to ensure you're not leaving money on the table or triggering an accidental audit.

For retirees with a portfolio of $250,000 or more, tax decisions become less about filing and more about strategy. Working with a financial advisor can help reduce costly oversights and ensure that you're making the most of your tax breaks.

Investing in a K-Shaped Economy

While some may be optimistic about the economy, others may be concerned about inflation and continued economic uncertainty. Real estate investing can provide a hedge against inflation and stock market declines as part of a well-diversified portfolio.

Platforms like Mogul and Arrived offer fractional ownership of single-family rental properties, providing monthly rental income, tax benefits, and real-time appreciation. These options allow individuals to add real estate to their portfolio without the need for large deposits or hands-on property management.

Conclusion

The debate about the state of the economy is ongoing, with both optimists and pessimists finding data to support their positions. However, it's essential to consider multiple indicators and take a precise approach to tax planning to ensure that you're making the most of your tax breaks and investments.

Ultimately, having a rock-solid financial plan and investments you trust is crucial, even during turbulent economic times. By staying informed and taking a strategic approach to your finances, you can navigate the complexities of the economy and make informed decisions about your investments.