Don’t Expect A Tax Refund This Year
The 2017 Trump/GOP tax bill was swiftly rammed through the Congress without any hearings, no Congressional Budget Office score and very little debate. As we know, the Trump/GOP tax bill brought back the days of $1 trillion deficits and hasn’t met any of the grandiose promises made by its supporters. Approximately 83% of this deficit funded tax cut will go to the top 1%. The tax cuts for the wealthy are permanent and the tax cuts for the rest of us are temporary and tiny.
Now that people are actually filing their tax returns, we are hearing from a lot of people whose taxes went up as a result of the Trump tax bill. One Trump supporter tweeted the following: Thanks to @realDonaldTrump and @GOP tax bill, my family was just hit with the largest tax increase in our lives by them getting rid of itemized deductions like mortgage interest on federal taxes. I’ve been a loyal conservative, voting Republican since I could vote. What a joke! I just did our taxes. To my utter shock and thanks to @realDonaldTrump and the @GOP tax bill, our mortgage interest counts for nothing and we are ending up paying huge amount MORE in taxes thanks to the Republican Party. We are essentially now stuck with a massive tax INCREASE!
The new tax law significantly increased the amount of money one must donate to qualify for a charitable deduction and cut back on deductions for taxes paid to state and local governments. Personal exemptions were ended and limits were placed on the mortgage interest deduction. The GOP tax bill even increased taxes on churches! The new law requires churches and other non-profit organizations to pay a 21% tax on fringe benefits they provide their employees.
Another hidden change by the Administration will further cut back on expected tax refunds. The IRS came up with a new withholding schedule and recommended it to employers. What happened was that many people’s pay checks were under withheld. The Administration wanted workers to feel the impact of the tax cut before the 2018 elections. Now those same employees will be paying in rather than receiving the refund they were expecting.
This surprise Trump tax increase has the potential to hurt the overall U.S. economy. The auto industry usually sees a healthy spike in sales in the first half of the year due to people receiving tax refunds. However, the auto industry is expecting a big drop in sales this year due to the Trump tax increase. This slump in auto sales may even push the economy into a recession.
There are many lessons to be learned from this fiasco. The process surrounding the passage of a bill matters. In the case of the Trump tax bill, the legislation received almost no scrutiny and it is doubtful that any Republican members of Congress actually read the bill. That’s what led to all of these nasty, hidden surprises.
What is even more disturbing was that the bill was passed for the benefit of the reactionary GOP billionaire donor class. Several Republican members of Congress openly admitted that they had to pass the bill or they would never receive another donation from the GOP oligarchs. Moreover, the GOP received a wave of donations from their billionaire “employers” just before the bill passed. Long story short, the entire process surrounding the passage of the tax bill was deeply corrupt.
The Trump/GOP tax bill also clearly demonstrates that the GOP is grossly incompetent when it comes down to the actual business of governing. The Republicans are good at winning elections by emphasizing hot button racial and cultural issues but they are clueless once they take power. Unfortunately, most Americans suffer from GOP incompetence.
As Democrats, we must remain united as we were in 2018. That unity and hard work resulted in an historic victory for the American people and a sharp rebuke to Trump and the D.C. Republicans. All of our presidential candidates are much, much better than Trump. I would advise you to work for your favorite candidate and refrain from attacking the other ones. I plan to support the Democratic presidential nominee in 2020. We can do it! I believe that we will win in 2020!