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Tax Returns Increased in 2019 After All

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This tax season liberals fearmongered over Americans allegedly receiving smaller tax returns for the 2018 tax year than in 2017, which they attributed to the Trump tax cuts.

A widely circulated CNN article was widely misinterpreted to imply that taxes are up in 2018. “The average refund is down about 8% under the first full year of the overhauled tax code, according to data released by the IRS on Friday. Refunds averaged $1,865 compared to $2,035 for tax year 2017,” reported Victoria Cavaliere.

A large source of the confusion came from the fact that many saw their percentage of income withheld from paychecks decrease (meaning they got to pocket more throughout the year). Suppose for the sake of simplicity that someone earns $50,000 a year, pays 20% tax ($10,000 annually), and pays that tax in the form of $200 a week for a 50-week work-year. Since they pay exactly what’s owed, they would receive no refund. Now suppose the tax rate decreases to 18% (so $180 a week is owed), but because a smaller percentage of taxes are withheld, only $170 is actually paid. Thus, while that person had their taxes decrease by $100 overall, they would still end up owing $500 at the end of the year. As I noted in a prior article on the same subject, roughly 10 million people saw changes in withholdings that would result in less money being taken from their paychecks throughout the year (and thus reducing their refunds).

To associate a decline in refunds with an increase in taxes is a basic misunderstanding of what a refund is (taxes paid above what was owed). And now we’re learning that the left’s confusion of how taxes work wasn’t even predicated on any (misunderstood) truth. While there was a slight decrease in the percentage of people receiving refunds, according to a newer article from CNN’s Donna Borak, it turns out that refunds were up after all! As she writes:

The average refund check was $40 more this year than last year through the week ending February 22, according to data released by the Internal Revenue Service on Thursday. That’s just 1.3% more for the roughly 47.4 million Americans whose returns were processed for the most recent week, compared to the same period last year. The Treasury also noted in its latest release that tax refunds on average week-over-week jumped 19% to $3,143 compared to last week’s average of $2,640. The increase, they said, is largely due to remaining earned income tax credits and child tax credits that were disbursed this week. The two tax credits couldn’t be paid out until Feb. 15 under the law, resulting in bigger refund checks for Americans in the past two weeks.

I must note, while the left was wrong about tax returns decreasing, you really ought to have wished they were right. After all, wouldn’t you rather have your money when you earn it, instead of waiting a year for the government to hold it interest-free before refunding it to you?


Photos by Getty Images

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