Under Trump’s Tax Plan, 25% Of Americans Will Receive No Tax Refund
In past years, a solid three-quarters of Americans could expect to receive a tax refund come tax time, but this year, under President Donald Trump’s signature legislative victory — the 2017 Tax Cuts and Jobs Act — the government will cut a check to only about 25 percent of American taxpayers.
The development looks to be one more reason that Trump’s tax law will continue polling poorly, despite Republican attempts to sell it as a success.
People have already taken to social media, using the hashtag #GOPTaxScam, to vent their anger. Many blame President Trump and the Republicans for shrinking refunds. Some on Twitter even said they wouldn’t vote for Trump again after seeing their refunds slashed.
The uproar follows the passage of a major overhaul to the tax code in December 2017, which was enacted with only Republican votes and is considered the biggest legislative achievement of Trump’s first year. While the vast majority of Americans received a tax cut in 2018, refunds are a different matter. Some refunds have decreased because of changes in the law, such as a new limit on property and local income tax deductions, and some have decreased because of how the IRS has altered withholding in paychecks.
According to the Internal Revenue Service, the average tax refund is down 8 percent — or $170 — from last year, and The Post said so far, the number of people getting a refund is down by nearly a quarter.
But the IRS says too much shouldn’t be read into the data at this point, as the numbers only reflect tax returns filed through February 1 and also include delays caused by the partial government shutdown.
Still, experts believe frustrations will grow as more Americans are met with surprise when they file their returns.
The Government Accountability Office (GAO) warned as early as last summer that millions of taxpayers would see their refunds disappear and millions more would find they owe the government money, The Post reported.
The GAO pointed to an IRS estimate that about 4.6 million fewer filers would receive refunds this tax filing season. Another 4.6 million filers were likely to owe money who had not had that experience in the past.
There is no estimate for how many people could still receive a refund but a smaller one than before.
While most people saw their tax bills fall under the new law — to the tune of about 80 percent of taxpayers — changes to employer withholding, which lightly padded each paycheck through the year, mean that fewer people will get back a lump sum at the end of the year.
This is by design: the government wants more people to pay in only what they owe, rather than overpay and receive a refund check at tax time.
But tax refunds remain incredibly popular among American taxpayers, and finding out they won’t be receiving money this year is generating plenty of anger, as well as leading some to wrongly believe their taxes increased.
The IRS encouraged Americans to review their withholding level last year, but few did. About 75 percent of filers received refunds in recent years. Many Americans appear to like getting a refund because they feel that if they received an extra $20 to $40 a week, they would spend it. But when they get a one-time refund of $1,000 to $2,000, they put it toward paying off credit card debt, paying down a mortgage or saving for retirement.
The refund situation marks the latest potential trouble for Republicans over their tax bill. They argued it would be a political victory, but it has consistently polled poorly.