Smaller tax refunds put GOP on defensive

[riversedge]

Smaller tax refunds put GOP on defensive

https://thehill.com/policy/finance/430305-smaller-tax-refunds-put-gop-on-defensive


By Naomi Jagoda - 02/18/19 02:20 PM EST


The Trump administration and key GOP lawmakers are playing defense after early data showed Americans are getting smaller tax refunds in the first filing season under the GOP tax law.

The average refund size through Feb. 8 was 8.7 percent smaller than the same period last year, according to IRS figures. Democrats have seized on the numbers, arguing they prove that the 2017 tax-code overhaul by Republicans was a “scam” designed to help the wealthy at the expense of the middle class.

Republicans have pushed back, emphasizing that most people are seeing a reduction in their total tax liability and that smaller refunds are preferable because they mean taxpayers were paying a more accurate amount throughout the year via their paychecks.

“Critics of the tax cuts are squealing that lower refunds means that taxpayers are paying more in taxes. That argument is pure hogwash,” Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said in a statement Friday, as part of a Q&A document published by his office. .............................

[PoindexterOglethorpe]

1. Oh, dear.

People who are dependent on a large refund at tax time usually don't understand what is really going on. They haven't a clue that they've given a significant loan to the federal government. Instead, they think of the refund as magic money, and don't understand where that money really comes from.

I've spent a lot of time over several decades trying to get people o understand where their refund comes from usually to no avail. There's a distant (but only a distant) chance that this year we can get people to understand how this really works. I'm not holding my breath.

[Arkansas Granny]

3. Many of the people who depend on their refunds qualify for EIC which can

amount to a few thousand dollars. I don't know how the new tax laws affect that amount, but for families that live paycheck to paycheck, that refund is a windfall vs. the $5 or $10 a week they might see on their paycheck.

[PoindexterOglethorpe]

12. EIC is not the same as a refund from over whithholding,

although a lot of people wouldn't pay attention to that. Most of the complaints about lack of refund, or suddenly owing taxes this year are not from those getting the EIC, but rather from those who lost a lot of itemizing, and didn't notice that the larger paycheck was because less money was being withheld.

I have no idea what, if anything, happened to the EIC.

[tblue37]

5. Back in the day there was a thing called Christmas Club. We were poor, but Mom put $2.00

a week into a Christmas Club account so she would have over $100 to buy gifts for us kids at Christmas. It was a strain to sock away that much money, but she managed to do it to make sure we all got a Christmas gift.

Despite the fact that it is an interest free loan to the government, I think many people who can't force themselves to save money do it that way, because they never see the money in the first place, so then the lump sum refund seems almost like found money to them. But they come to depend on that chunk of change showing up each year.

[PoindexterOglethorpe]

13. I actually still do my own personal Christmas Club.

I put the money in an envelope at home, and use it around Christmas time for various extras.

And yes, people come to depend on that refund and don't really understand that there might be a better way to budget in the first place.

[Cha]

2. 'Bout time, eh?

[Achilleaze]

4. "Forget our old lies about our tax cuts for the rich." - republicans

"And swallow our new lies about our tax cuts for the rich." - republicans

[scarytomcat]

6. The thing is that rethugs told us that they where lowering our taxes

but they just lowered the withholding and eliminated deductions so we are paying more in taxes not less

[Vinca]

7. It sounds like the tax plan for the average schmuck was to mess around with the withholding

tables so they think - for an entire year - they're getting more in their paychecks and thank Dear Leader. Sadly, come April 15, the bill is due.

[Achilleaze]

8. The republican Tax Cut for the Rich totally screws Americans

[COLGATE4]

9. Grassley has such a way with words...

[TheFarseer]

10. The point I always make is

They screwed around with the withholding to make it look better before an election and then after they’ve already got your vote, then you find out it wasn’t nearly as good as you thought.

[Tom Rinaldo]

11. Their cynical political calculation was obvious

Republicans knew damn well that most people assumed that a tax cut bill meant paying less taxes, not a new formula that resulted in significantly smaller tax refunds at year's end, and in many cases taxes due instead. They knew people would be pissed, but the anger would not surface until after the 2018 midterm elections. And they hoped by shifting the formulae to put a few more bucks into more people's wallets each paycheck prior to the election that would help them retain the House. The subsequent blow back was a price worth paying if it helped them hold the House, which initially they thought it would.