The Washington Post Fact Checker called out Sen. Kamala Harris (D-Calif.) for her misleading tweet February 11.
The average tax refund is down about $170 compared to last year. Let’s call the President’s tax cut what it is: a middle-class tax hike to line the pockets of already wealthy corporations and the 1%.
— Kamala Harris (@KamalaHarris) February 11, 2019
Harris, who is running for president in 2020, jumped on an Internal Revenue Service announcement that preliminary data shows that the average tax refund check is down $170 or about 8 percent this year compared to last year.
Here is what the Post had to say about Harris’s “nonsensical” claim.
The average tax refund is down, at least according to very preliminary data for returns processed through Feb. 1. (That’s essentially one week of filing data.) But the size of a refund tells you nothing about a person’s tax bill.
The tax law required the IRS to change tax withholding tables. The IRS encouraged Americans to review and update their W-4 forms to make sure the right amount was being withheld from their paychecks, but a survey by H&R Block indicated that 80 percent of Americans failed to do so.
In other words, if you left everything just the same, you can’t expect the same result. The new tax law raised the standard deduction but also eliminated personal and dependent tax exemptions. While the law reduced tax rates, it also capped a deduction for state, local and real estate taxes, which could really mess up a person’s tax situation, especially if they live in a state with high taxes such as California, New York and New Jersey.
But the size of the tax refund has no bearing on whether a person’s taxes rose or fell. A person might end up giving less of their income to the IRS — and still end up with a smaller tax refund.
“Change in refunds does not equate to change in tax liability, since withholding amounts were adjusted,” said Joseph Rosenberg, senior research associate at the nonpartisan Tax Policy Center.
Though few people look at this way, a smaller tax refund means you gave less of a loan to the U.S. government over the course of the year. Ideally, you should end up with no refund or tax due.
As for Harris’s claim that the tax cut is actually a middle-class tax hike and only lines the pockets of the top 1% the Post notes that the top 20 percent of income earners paid 95.2 percent of individual income taxes in 2017 and the top 10 percent paid 81 percent. The top 0.1 percent paid an astonishing 24.1 percent of taxes.
The Post also quoted a statistic from the nonpartisan Joint Committee on Taxation which estimates that 572,000 taxpayers will file returns with an income category of more than $1 million, compared with more than 27 million in the $50,000 to $75,000 category and almost 70 million in the under-$50,000 category.
That means that when the tax cuts are divvied up there will be less per middle-class taxpayer than the wealthy since there are so many more of them.
The Tax Policy Center found that 80.4 percent of all taxpayers would have a tax cut, compared with about 5 percent experiencing a tax increase according to the Post.
According to Chris Edwards of the libertarian Cato Institute when you exclude payroll taxes (Social Security and Medicare) which the Trump legislation left untouched it appears that the middle-income quintile receives the largest share of the tax cuts.
Harris’s office told the Post that she was referring to the “long-term effect” of the tax cut.
The Fact Checker’s conclusion:
The Pinocchio Test
This tweet combines two factoids into a highly misleading package. Yes, tax refunds are smaller, based on preliminary data. And, yes, in the long run, the Trump tax cut raises taxes on the middle class — if you make the probably unrealistic assumption that Congress will not act to rescue tax cuts for individuals.
But Harris presented these facts without nuance or qualification, making it appear as though the smaller tax refunds were evidence of a tax hike on the middle class. In reality, the size of a tax refund reflects nothing about the size of a tax cut or tax increase — and at least in 2018, the vast majority of middle-class Americans can expect to pay less in taxes as a result of the Trump tax law.
Harris earns Four Pinocchios.