Smaller tax refunds put GOP on the defensive

Trump administration and leading GOP lawmakers play defense after preliminary data show that the United States has more modest tax refunds in the first filing season under GOP tax law .

According to IRS figures, the average amount of repayments to February 8 was 8.7% lower than the same period last year. Democrats have seized the numbers, arguing that they were proving that the Republicans' reform of the 2017 tax code was a "scam" designed to help the rich at the expense of the middle class.

Republicans reacted by pointing out that most people saw a reduction in their total tax liability and that smaller refunds were preferable because they meant that taxpayers were paying a more specific amount throughout the year via their pay check.

"Critics of tax cuts are concerned that lower refunds mean taxpayers are paying more taxes. This argument is pure hogwash, "chairman of the Senate Finance Committee Chuck GrassleyCharles (Chuck) Ernest Grassley: Trump and Dems Launch Drug Price Talks Senate Approves Frontier Bill to Stop Closing Grassley Market Makes Hearing After McConnell Closes Senate Speech MORE (R-Iowa) said in a statement Friday as part of a question-and-answer document issued by his office.

"Decision makers need to know that it's intellectually dishonest," Grassley added. "What is really happening is that they are trying until Sunday to sabotage the law on tax cuts and job creation."

A senior Treasury Department official earlier this week warned against excessive reading of preliminary statistics, but also acknowledged that the administration expects repayment amounts and the number of Taxpayers receiving government money are declining this year.

Restitution statistics could be the last political setback of the GOP around the 2017 law.

Republicans were hoping the tax law would help them in the 2018 midterm elections, as people were starting to receive higher pay because of the IRS's update of withholding guidelines reflecting the lower rates of the law and the broader standard deduction.

But the GOP ended up losing its majority in the House and polls revealed that many people had never noticed the increase in their paychecks.

Christina Taylor, head of tax operations at Credit Karma Tax, said that for many people, repayments are their "biggest paycheck and they look forward to it".

Most of the amendments to the law came into effect in 2018, which means that it is the first time that people have filed taxes after they have been implemented.

On Thursday, the Treasury official said that the administration expects that about 80% of citizens pay less tax for 2018, while 15% will see their tax liability remain at about the same.

But taxpayers can receive a reduction in their total taxes while benefiting from smaller repayments, or owe money to the IRS. People receive repayments when they have too much money withheld on their salary throughout the year.

Democrats, including the declared and potential presidential candidates of 2020, oppose the first data on tax refunds.

Sen. Sherrod BrownSherrod Campbell BrownGOP The green coup of the Green New Deal is a good deal for Democrats Sherrod Brown is arguing for a Medicare membership proposal in place of "Medicare for all". The major issue is Trump, Dems: open discussions on the price of drugs PLUS (D-Ohio), who is considering a run for the presidency, said by introducing a bill to extend the earned income tax credit, which says "more and more Americans are filling out their declaration of taxes and get their refund, and they realize that the taxes of the president the law was a bit of a sham. "

Sen. Kamala HarrisKamala Devi HarrisSenate Dems introduces a bill to prevent Trump from using disaster funds for the construction of a Klobuchar wall, O Rourke visiting Wisconsin while the race to the Horizon 2020 warms Sherrod Brown's expectations in favor of the proposal to buy Medicare instead of "Medicare for all". (D-Calif.), Who has already announced his candidacy, tweeted in the light of the repayment data: "Let's call the President's tax cuts, what it is: a rise in the number of people." middle class tax to cover the pockets of already rich companies%. "She was criticized by the fact checkers for her tweet because most taxpayers are benefiting from a tax cut rather than an increase.

Republicans defend their tax reform by explaining that people often continue to benefit from a tax break even though their repayment is lower.

After the release of the first batch of weekly IRS refunds, the Treasury responded on Twitter by calling the "misleading" statistics reports. When the second batch of data was released Thursday, the Treasury issued a statement claiming that it was a good thing if the repayment because it means their withholding tax throughout the year. year is more accurate.

"Most people are seeing the benefits of tax reduction in larger paychecks throughout the year, instead of the tax refunds that result from people paying too much over the years. government, "said a spokesman for the Treasury. "Smaller repayments mean that people withhold taxes appropriately based on their tax liability, which is good news for taxpayers."

The leading Republican tax writers have also pushed back other sanctions in the 2017 law.

representative Kevin BradyKevin Patrick BradyL's GOP Tax Lawyer joins Ernst and Young. Lawmakers beat lobbyists at a charity hockey match Democrats step up efforts to get Trump tax returns PLUS (R-Texas), a member of the House Ways and Means Committee who was president when the tax bill was passed by Congress, said on Fox Business Network that "if you live like a paycheck Like most families, you get tax relief every month, you do not want it a year later – which is the repayments. "

GOP strategists said it was essential that Republicans get their message across, as Democrats plan to make the tax law attack a way to defeat President TrumpDonald John TrumpMcCabe stated that he had been sacked for "opening a case against" Trump McCabe: Trump said, "I'm mocking, I believe Putin" was confronted with US information about North Korea. McCabe: Trump talked about his election victory interview bizarre job interview PLUS in 2020, arguing that the economy is problematic for the middle class.

"I think Republicans need to be on their guard to go back at every turn," said GOP strategist Ford O'Connell.

Another Republican strategist, Ron Bonjean, said: "It is important to define what is happening before the Democrats confuse the problem and anger the middle class Americans when they are really better off."

Some analysts predict that repayments could end up being the same size, or even larger than last year.

Morgan Stanley said Friday in a report that it was too early to draw any conclusions on repayments this year and said that Treasury data as of February 14 show that the total amount of repayments issued is slightly higher than what it is. It was at the same time last year.

Ryan Ellis, a conservative tax lobbyist who also helps people report their taxes as a registered agent, said taxpayers could receive larger rebates this year, such as those who will benefit from the extension of the Children's tax credit and a new deduction for passing businesses, often have not filed their taxes or received their refund at this point.

He said that Republicans should not concede that repayment amounts will be down for the entire year.

"Everyone jumps the weapon here," said Ellis.