Smaller Tax Refunds Put GOP On Defensive

The Trump administration and key GOP lawmakers are playing defense after early data showed Americans are getting smaller tax refunds in the first filing season under the GOP tax law. 

The average refund size through Feb. 8 was 8.7 percent smaller than the same period last year, according to IRS figures. Democrats have seized on the numbers, arguing they prove that the 2017 tax-code overhaul by Republicans was a “scam” designed to help the wealthy at the expense of the middle class.

Republicans have pushed back, emphasizing that most people are seeing a reduction in their total tax liability and that smaller refunds are preferable because they mean taxpayers were paying a more accurate amount throughout the year via their paychecks.

“Critics of the tax cuts are squealing that lower refunds means that taxpayers are paying more in taxes. That argument is pure hogwash,” Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said in a statement Friday, as part of a Q&A document published by his office. 

Policymakers ought to know that is intellectually dishonest,” Grassley added. “What’s really happening is they are trying every which way to Sunday to sabotage the Tax Cuts and Jobs Act.” 

The refund statistics have the potential to be the latest political setback for the GOP around the 2017 law. 

The Treasury official on Thursday said the administration expects about 80 percent of people to pay less in taxes for 2018, while 15 percent will see their tax liability stay about the same.

GOP strategists said it’s crucial for Republicans to get their message across because Democrats plan to make attacks on the tax law part of their path to defeating President Trump in 2020, arguing that the economy is problematic for the middle class.

“I think the Republicans need to be on guard to push back at every turn,” said GOP strategist Ford O’Connell.

Read more from Naomi Jagoda at The Hill

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Analysis & Political Strategy