OP-ED: Tax reform means more year-round benefits for Pennsylvanians
Tips for preparing your 2018 taxes. Wochit, York Dispatch
With tax filing season in full swing, several hot early stories have detailed a drop in tax refunds as an indicator that the Tax Cuts and Jobs Act of 2017 isn’t benefiting the average American. This correlation is false.
As you can imagine, left-leaning politicians and allied media outlets gobbled this idea up, repackaged it and spread it like wildfire — but the data doesn’t back those stories up.
For example, Sen. Kamala Harris slammed tax reform as a “middle-class tax hike to line the pockets of already wealthy corporations and the 1 percent.” The Washington Post gave Harris’ claim four Pinocchios — essentially a “pants on fire” ruling. Harris has never corrected herself.
House Democrats on the Ways and Means Committee tweeted out an article trashing the TCJA, blaming “falling refunds” on the “Republican tax scam.”
So I wasn’t surprised when I read this paper’s editorial board peddling the doom and gloom theory that the poor and middle class are being hurt by tax reform, when the reality is actually quite the opposite.
We’ve been here before. When we passed TCJA in 2017, the pushback was real. There was hand-wringing and hollering about the sky falling. When asked about tax reform, then-Minority Leader Nancy Pelosi even predicted “Armageddon.”
It’s been a year and the sky is still there. Armageddon didn’t happen — and to now-Speaker Pelosi’s dismay, Americans have more money in their pockets. Maybe the reason liberals cling to those erroneous beliefs is because they want so badly to believe Republicans could never do anything to benefit the American people.
This editorial board pointed to decreased refunds, minimized itemized deductions and tax increases as some of the ways tax reform is “hurting” Americans, citing misleading statistics in the effort to make a political point.
That couldn’t be further than the truth.
Let’s start with tax refunds. First, the size of your tax refund has nothing to do with your overall tax bill. It simply reflects the amount you overpaid the IRS throughout the year.
Getting a fat refund basically means you gave the federal government a zero percent interest loan. Instead, you now have more money in each paycheck, which is particularly helpful for so many Americans who may be living paycheck-to-paycheck.
Here’s the real truth the Dispatch doesn’t want to tell you: Most middle-class Americans are seeing a tax cut — and they’re seeing the benefits of tax reform.
People have more money in their paychecks throughout the year, not just a one-time benefit in a tax refund. Instead of overpaying the IRS, you’re keeping more of your hard-earned money all year round.
That’s extra cash in your paycheck and in your bank account every month.
For the average family, that adds up. That’s money for groceries, a car payment or a down payment on a house.
Like many other states, Pennsylvania is also seeing the positive impact of TCJA. The Independent Fiscal Office (IFO) recently created several hypothetical scenarios to see how tax reform will affect PA families.
In nearly every one of these cases, Pennsylvanians received a tax cut — and those numbers don’t just include the wealthy. CNN Money estimated the average tax filer in Pennsylvania is seeing a $1,330 tax cut.
These people are farmers, teachers, small business owners. They’re your friends, families and neighbors.
These people are you.
Now, about tax deductions and tax refunds.
This year, 90 percent of Americans will see a doubled standard deduction and lowered tax rates. In 2017, the standard deduction for married taxpayers filing jointly was $12,700. Thanks to the TCJA, it’s now $24,000.
Families are seeing the benefits of a doubled Child Tax Credit, which has increased from $1,000 to $2,000 per child. Most people’s tax filing process is now incredibly simple, since they can opt to take the standard deduction versus itemizing.
Leaping to unwarranted conclusions about tax refunds being down is not only misleading -- it’s actually false. Morgan Stanley estimates 2019 refunds will increase by 26 percent.
So let’s do the math.
Income tax revenue has increased.
In Pennsylvania, the state saw a $340 million increase in state revenue thanks to tax reform. The average person in my district will see an extra $1,067 in savings as a result of TCJA.
The Dispatch seems to think Pennsylvanians won’t even be able to afford a 55-cent stamp thanks to TCJA, but you actually could buy 1,940 stamps with that much money.
Maybe you could use a stamp to send a letter to the Dispatch and ask that they discontinue printing easily disprovable “facts” to make a political point.
The Dispatch pointed to our growing deficit as a reason why Americans shouldn’t support TCJA. I share their concern about our growing debt and have routinely called for a reform of our budget process, which pushes out-of-control spending. We have work to do there but TCJA isn’t the driver of our debt. Spending is.
President Trump agrees and is calling for a five percent spending cut for every department except defense, while Democrats seem more than happy to push priorities like Medicare for All and the Green New Deal, which will cost $32 trillion and $93 trillion, respectively.
The TCJA has made it abundantly clear what happens when your money is put in your hands, not the government’s. Tax and regulatory reform have unleashed economic growth in our country, leading to a bright economic picture. We currently have the hottest jobs market in half a century while the median income has soared to $61,000.Americans are feeling optimistic about their futures, which are filled with possibilities in large part due to more money in their pockets.
There’s more to be hopeful about and a lot to look forward to. And contrary to what the Dispatch believes, I know we’re on the right track.