So there are many stories out there about people are distraught to find that their tax refunds are much smaller than they anticipated, or even worse they owe a bunch in taxes.
So there are two things going on here - first the tax cut was quite selective, and even wealthy people living in high-tax states are likely to find their actual tax rate has increased. Second, the withholding amounts might have been lower than they were in the past - thus some people will actually be paying less tax overall but will get a smaller refund than historically.
But either way, this is the Democrat’s chance to play the GOP’s own game on them - the one the GOP did with the ACA. You seize on the individuals who are disappointed and magnify their stories. This should be a major campaign theme going forward - huge tax cuts for the big guys and company owners and tax increases for the small guys.
I’d love to see if a House subcommittee could get hold of the tax returns of the people in Trump’s cabinet and disclose just how much less tax they paid. (Likely have to wait until next year to do this as most of these folk will get 6-month extensions).
I recall a withholding change under Bush. I had been setting aside extra to pay for untaxed income and was unhappy to learn that personnel had reset my withholding choices to a default one exemption. I suspected the Bush admin was trying to enhance the impression of more take-home money implying a large tax cut to accompany the insulting $300 check.
I do not recall getting a good answer why my W4 was reset, but it could be payroll not knowing what to do about new tax codes and using a default. Or it could be a misleading advisory from IRS, but I would think that would be known.
There is a sort of conventional wisdom that withholding too much is for suckers. Back when you could get a decent interest rate on savings it seemed logical to risk underpaying and saving the cash instead. Of course, few would actually do this, but the feeling is common that the Treasury is nor a smart place to park your money. So I can see personnel offices feeling it was natural and obvious to reset withholding rates in advance of filing returns, instead of waiting to see the results.
In one way there is a risk of overpayment. If you send money but not the return, because you know you owe money but haven’t had the time to pull together your numbers, it will only stay as a credit balance for three years. Then it reverts to the Treasury. But few of us face that risk. I always preferred substantial excess withholding. IRS actually prefers we don’t—I received a letter suggesting I should adjust my choices.
Well EVERY TAX BRACKET was REDUCED !!! Try paying 37% of your wages and you would sing a much different tune . The reason some are seeing less in tax returns has to do with HIGH TAX STATES and only being able to deduct a max of $10,000 in property taxes , and I say if your property taxes are above $10,000 F - U .
Oh gee, the tax tables that employers withhold taxes by allow for less in withholding, what a surprise people will get a smaller return.
Who’s responsibility is it to ensure that you withhold the correct amount to ensure not writing a check at the end of the year?
Who’s responsibility is it if you want to over withhold (a stupid choice ) for a bigger return?
Not even close.
It’s time for the Federal Government to level the playing field. Everyone in the country gets the same maximum amount to deduct from their taxes. If your stupid enough to live in a high tax state, you get to pay the bill, not the rest to the taxpayers in the US.
And in any case, people are stupid thinking the government is giving them money with a return when it’s their own money.
p.s. Tax cuts are a funny thing.
The people paying no Federal Income tax will see no change.
The middle class $30,000 and $75,000 pay an average federal tax rate of 5.8% see a small tax cut.
Those that make more will see more.
Amazing isn’t it, those that pay the most in taxes will receive the most in a cut.
The really amazing thing is the top 10% pay 70% to all Federal income taxes as the US has the most progressive income tax in the world.
Yet people like yourself think they should take more.
Maybe some day you will finally come to the realization that it’s a SPENDING problem first and foremost as this year again the Federal Government set a record in taxes collected.
And yes the democrats/progressives will likely win the presidency with their policy of demonizing the people would work hard for a living with their politics of envy.
