According to Yahoo Finance, the IRS has found that U.S. taxpayers paid $93 billion more in 2018 than in 2017 due to Trump’s tax cuts. This is partly due to the Treasury Department processing 1.5% more individual returns from 2017 to 2018.
The IRS suggested taxpayers update their withholdings once the Tax Cuts and Job Acts (TCJA) passed. Although many experienced small increases in their paychecks, few noticed the change. Instead, most people complained about smaller refunds and “surprise” tax bills.
In 2018, the IRS collected $1.97 trillion in gross collections before refunds. The year before, that number was $1.87 trillion. Although refunds increased, they did so slightly. In 2018, $398 billion was refunded to taxpayers while in 2017, $386 billion was refunded. After refunds, $93 billion more was refunded in 2018 than in 2017.
Democrats criticized the Treasury for making it seem as though American had experienced huge gains after the tax cuts.
“It looks like the Trump Treasury Department spent 2018, an election year, goosing people’s paychecks by under-withholding, and it should have been obvious that the bill would come due eventually,” Senate Finance Committee Ranking Member Ron Wyden (D-Ore.) said.
Senate Minority Leader Chuck Schumer (D-NY) said, “Many Americans depend on their tax refund to pay bills and make ends meet – but this tax season, working families will see smaller than expected returns and surprise tax bills because the Trump administration used smoke and mirrors in a shallow attempt to exaggerate the impact of their tax law on middle class families for political reasons.”
The Tax Policy Center found, “The lowest income households (those making less than about $25,000) got an average tax cut of about $40. Middle-income households (who made between about $48,000 and $86,000) paid about $800 less. Those in the top 1%, who made $733,000 or more, got an average tax cut of about $33,000.”
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