Do Smaller Refunds Mean Higher Taxes?

Some Americans are shocked to discover that their tax refunds are lower than before the Trump tax cuts, leading certain politicians and media outlets to question whether the middle class really got hit with a tax hike.California Sen. Kamala Harris, a 2020 Democratic presidential candidate, was among those to push the narrative."The average tax refund is down about $170 compared to last year. Let’s call the President’s tax cut what it is: a middle-class tax hike to line the pockets of already wealthy corporations and the 1%," tweeted Harris.The Washington Post Express ran a story focusing on middle class families stressed out by their smaller-than-expected refunds and fuming that Trump didn't really raise their taxes. Only at the end of a thirteen-paragraph story did the Post reveal that those feeling ripped off were actually pocketing more money as a result of the tax cuts.National Taxpayers Union President Pete Sepp says the facts show the vast majority of Americans got a tax cut.  In fact, 90 percent of Americans making between $40,000-$200,000 per year are expected to see lower taxes.So why are the refunds smaller?"The reason why some refunds appear to be lower, and we're talking about less than 10 percent lower, is that much of the tax cut already showed up in bigger paychecks throughout 2018."When you take the bigger paychecks from 2018, combine it with the refunds that people are seeing now, you're still getting a net tax cut.  The problem is people have come to depend on large tax refunds to do things like make major purchases or pay down debts or put more money into savings.  That something you could be doing all during the current tax year," said Sepp.The Post has now published more analysis directly stating that most taxpayers did in fact get a tax cut.Listen to the full podcast to hear Sepp's message for politicians and media suggesting smaller refunds mean higher taxes and why he says big tax refunds are actually worse for you than owing or paying nothing at tax time.