Trump’s signature tax cut — not to be confused with his signature, wall-based immigration policy, or his signature gold toilet — has finally settled on the American people as Tax Day came and went. And the reviews are mixed.
News reports proliferate this week on the extent of the cuts. The Washington Post’s fact check found that about 65 percent of Americans did, in fact, experience a cut in their overall taxes, with an average reduction of $1,200.
But anecdotal reports across the country document what has become a common complaint this year: Where’s my refund?
According to data from H&R Block, tax refund checks are down an average of 1.1 percent from last year. And people are starting to complain, even though on paper they just saved $1,200 on the year.
Believe it or not, most Americans do not fully understand US tax policy. What they do understand is that Uncle Sam takes a mighty swipe out of their paychecks every month — about a third — and that after they file their taxes, they get some of it back.
It’s a ridiculous situation: The government holds our money at no interest for more than a year before paying it back. But it does incentivize people to file their taxes, and if people had to cut a check for all that money at the end of the year rather than having it deducted from their paychecks, there would be open revolt in the street.
Trump’s tax cut relied on a bait and switch: for the last nine months of 2018, the feds took a smaller piece of everyone’s paycheck, giving people tangible, written proof of a lowered tax rate with the added bonus of pumping a few extra billion into the economy — albeit in tiny increments — over that time.
And what people understand now is that their refund checks — which in most cases is already earmarked for things like home-improvement projects, debt reduction, family vacations, auto repairs and other large purchases — are smaller.
How’s that going to play out come election time in Trump’s America?
Join the First Amendment Society, a membership that goes directly to funding TCB‘s newsroom.
We believe that reporting can save the world.
The TCB First Amendment Society recognizes the vital role of a free, unfettered press with a bundling of local experiences designed to build community, and unique engagements with our newsroom that will help you understand, and shape, local journalism’s critical role in uplifting the people in our cities.
All revenue goes directly into the newsroom as reporters’ salaries and freelance commissions.