Allow us one last word about this year's tax season, which technically ended on Monday (unless you are among the unlucky souls who had to file an extension).
There's been an interesting discussion in the letters to the editor on this page about the effect of the 2017 federal tax reform on individual tax bills: Some letter writers have complained that they've ended up paying more taxes than in previous years, despite the 2017 tax legislation, pushed through Congress by President Donald Trump. Others have said that most taxpayers would be paying less in federal taxes.
We obviously can't judge individual cases. But we did happen to notice a story earlier this week in The New York Times that shed some light on the issue and also offered some commentary on the very odd times in which we live.
The Times story concluded that most U.S. taxpayers probably did get a tax cut last year.
And it added this interesting footnote: There's a good chance, reporters Ben Casselman and Jim Tankersley noted, that many taxpayers don't believe they got a tax cut.
Before we go forward, we should note that we have serious issues with the 2017 tax cut, which unduly benefits the rich and adds billions to the nation's debt. And it's worth remembering that the tax cuts in the law are scheduled to expire in 2026 — and your federal taxes will increase then.
Setting that aside for the time being, the evidence shows that most Americans got a tax cut; the Tax Policy Center estimates that 65% of people paid less under the law. Just 6% paid more, the Times reported — and the newspaper quoted H&R Block, the tax-preparation company, as saying that two-thirds of returning customers paid less tax this year than last. The Times said that taxes were down, on average, in every state.
So what's driving the popular perception that taxes are up? The Times pointed to some possible reasons:
First, the tax savings were relatively small for many families: The middle fifth of earners got about a $780 tax cut on average, the Tax Policy Center said. But it's worth noting that taxpayers didn't see rebate checks from the government, the way they did in 2001. Last year's tax cuts came mostly in the form of lower withholding from paychecks. (Which brings to mind this timely hint: Take a look at the amount withheld from your check. It may be time to adjust it.)
Another factor the Times noted is the fact that this year's refunds have tended to be smaller than in the past — but, again, if you're routinely getting windfalls from your refund, that's a signal to adjust your withholding.
But the primary factor pointed to by the analysts the Times spoke to was this: Liberal opponents of the law attempted (and apparently with success) to brand tax reform as a tax increase on the middle class. Those opponents have backed down somewhat from those claims, opting to focus instead on the scheduled tax increase in 2026 and how the tax reform offered outsized breaks to the wealthy. But the message stuck.
The tax fight isn't over, not by a long shot: Expect Democrats to hammer on the idea that the top 1% of taxpayers got nearly 17% of the total benefit from tax reform and got an average tax cut of more than $30,000.
You probably got a tax cut last year. But you probably got less than $30,000. (mm)
Last call for poems
Here's a reminder about today's Poem in Your Pocket Day: It's an opportunity to select a favorite poem, print out a copy (unless you have it memorized) and read it aloud to someone at some point in the day. Your dog or cat counts as a potential audience.
If you want to read it to a human, however, and despair that you might not have an opportunity to do so, our offer stands: Call us at 541-758-9502 (our voicemail message on Thursday will feature a short poem) and read it aloud after the beep. (mm)