Democratic presidential candidate Sen. Kamala Harris, D-Calif., has seized on early reports of lower tax refunds this year to make a dishonest attack against the 2017 Republican tax law.
To be clear, the level of people’s tax refunds has absolutely nothing to do with their overall tax burden, which will be lower for nearly every taxpayer as a result of the enacted tax changes. Federal taxes get withheld from paychecks throughout the year, and then by the following April, taxpayers file and they have to pay the balance if they under-withheld in the previous year, or they are issued a refund if they overpaid.
Thanks to marketing from tax preparation companies promising big refunds, Americans have come to view refunds as some sort of bonus they receive every April. A larger refund just means that they gave an interest free loan to the federal government by overpaying the previous year. That early data, which could change between now and April, show that on average people are receiving lower refunds, is merely a reflection of the fact that money was more accurately deducted from their paychecks throughout the year.
A Tax Policy Center analysis, which Democrats loved to cite for other reasons throughout the tax debate, found that 80 percent of taxpayers would receive a cut in 2018, compared with just 5 percent who would see their taxes increase. The remainder would see virtually no change. In other words, 95 percent of Americans will have either paid lower taxes in 2018, or about the same amount of taxes. Among taxpayers in the middle-fifth income group, 91 percent would pay an average of $1,090 less in taxes.
But this didn’t stop the media, or Harris, from exploiting confusion over the refunds. “Millions of Americans could be stunned as their tax refunds shrink,” read a headline in the Washington Post, one of many similar ones that have spread throughout the media.
“The average tax refund is down about $170 compared to last year,” Harris tweeted. Let’s call the President’s tax cut what it is: a middle-class tax hike to line the pockets of already wealthy corporations and the 1%.”
The average tax refund is down about $170 compared to last year. Let’s call the President’s tax cut what it is: a middle-class tax hike to line the pockets of already wealthy corporations and the 1%.
— Kamala Harris (@KamalaHarris) February 11, 2019
This is a dishonest and absurd line of attack. This would mean that in theory, Democrats could hike taxes by 20 percent, but set up withholding tables suggesting companies take out 30 percent more from people’s paychecks, and then tout a massive tax cut the following April when Americans get larger refunds. Come to think of it, the media would probably help them get away with it.
