Many millions of Americans filling out their 2018 taxes will probably get a rude surprised to learn that their refunds will be much less than expected or that they will actually owe money to the Internal Revenue Service after years of receiving refunds.
People have already taken to social media, using the hashtag #GOPTaxScam, to vent their anger. Many blame Trump and the Republicans for shrinking refunds. Some on Twitter are saying they wouldn’t vote for Trump again after seeing their refunds slashed.
The uproar follows the passage of Trump’s so-called 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. Remember when con-man Trump said “Let’s call it the tax cut, cut, cut bill” and bragged to his rich friends at Mara Lago that he had made them all a lot richer?
While many Americans did receive a marginal tax reduction in 2018, tax refunds are a completely different matter. Many Tax 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 in a thinly disguised effort to make the Trump tax cut look bigger.
The average tax refund check is down an estimated $170 this year compared to last, the IRS reported Friday, and the number of people receiving a refund so far has dropped by 25%. This represents a big difference that will hit many middle-income families hard.
One word of caution this is that this is early data and reflects only returns processed through Feb. 1, and the partial government shutdown caused delays in processing filings.
Early data can shift a lot, some tax experts say, but there’s a reason to believe frustrations could rise as more Americans complete their tax returns.
There is 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.
Edited from Bloomberg News