...[J]ust to be sure that voters noticed all the good Paul Ryan had done for them, the Trump administration reportedly pressured the IRS to err on the side of withholding too little from Americans’ paychecks “so people will see big increases in their take-home pay ahead of this year’s midterm elections.”
This did not work out as planned. Even with (allegedly) light withholding, the the tax bill’s breaks for middle-class people weren’t large enough to attract much notice. Between changes in salaries, health-care premiums, and 401(k) contributions, most Americans didn’t detect much tax relief in their paychecks. The Trump Tax Cuts actually became less popular after they took effect. And, of course, Paul Ryan’s majority drowned in a blue wave.
Now, the bill for the GOP’s (reported) withholding shenanigans is coming due: The average American’s tax refund was 8.4 percent lower in the first week of 2019 than it was one year ago (under the pre-Trump tax code). And while Americans have trouble noticing tax changes when they’re dispersed across 12 to 24 separate paychecks, they do typically pay very close attention to the size of their refunds. About three-quarters of the country typically qualifies for a tax refund most years — and for many of those households, that check from the IRS is the largest lump sum they’ll receive all year.
“Ask people how much they paid in taxes, nobody knows. Ask them how much they got in their refund, people know,” Howard Gleckman , a senior fellow at the Tax Policy Center, told the Intercept’s David Dayen this week. “Everyone focuses on size of the refund, and it does affect perception.”
In other words: It looks as though the Republican Party implemented their signature tax bill in a manner that will lead many people who received tax cuts to believe that Donald Trump raised their taxes.In short, the Trump/ Republican wealthfare tax cut bill resulted not in job creation or sustained raises for workers (corporations used their windfalls on share buybacks and capital improvements), not in an economic boom (GDP is about what it has averaged since 2014 and is expected to slow significantly in 2019), not in significant tax reduction for the average American, and now not in increased tax refunds for the average taxpayer.
So what did it accomplish, you didn't ask? Under the wealthfare bill, the average 1 percenter will get a $51,140 tax break, the lower tax rates for corporations were made permanent while those for individuals lapse in 2025, and it eliminated the stabilizing individual mandate from the Affordable Care Act. You can't get much more dystopian than that, but that doesn't mean Republicans won't try if given the chance.
BONUS: David Cay Johnston goes into much greater detail on the effects of the Republican wealthfare bill.
