US citizens were in for a financial shock after they saw their tax refunds this year. Americans are using the hashtag #GOPTaxScam to express their anger. People are blaming the government, President Trump, and the Republicans for the shrinking tax returns.
A bill was passed in December 2017, when the tax code was overhauled by the government. This was a huge legislative win for the President, but not for the middle class or poor. While people did get tax cuts in 2018, it is not the same as refunds.
Tax refunds decreased due to changes in the tax codes within the new laws. There were limits on property and local income tax deductions. People were shocked to see their refunds being a lot less than expected, which were up to 8% lower than normal.
Tom Prugh, a middle-class citizen with an ordinary house in the suburbs, a wife and two children, said he was shocked at his low refund. He says nothing has changed in his family’s life in years. He is understandably upset at his almost $3,000 lower than a usual refund.
The Internal Revenue Service (IRS) has admitted that the recent government shutdown has caused delays. It says people should not worry or panic and not read too much into the data. The data says the tax refunds are down by 8%, and there may well be cause for concern.
The IRS also said not as many people filed their taxes last year, or filed them on time. They also estimated that around 4.5 million tax filers are more likely to owe money than receive refunds.
Americans are angry and are confusing their low tax refunds with tax cuts. There have been tax cuts and these do show up in bi-monthly payments but often people do not notice them.
The poor feel they are getting poorer. The middle class is battling to keep their heads above water. And as in all capitalist countries, the rich are certainly getting richer.
Has the new American tax legislation benefited the rich? Or has it just been disastrous for the poor?