Politics is a strange endeavor, and rarely has it been stranger than during the era of Trump. But it’s still curious to read that Oregon Democratic Sen. Ron Wyden is riled up because the federal government took less of the money that millions of Americans earned in 2018.
Which is to say, our senior senator apparently would prefer that your paychecks were smaller last year.
This is not a common position for any politician, of any party, to profess publicly, as Wyden did in a press release Tuesday.
The situation is rather more involved, to be fair.
But Wyden’s latest complaint about the Trump administration seems to be prompted more by the chance to score partisan points than by any legitimate concern that taxpayers have been treated shabbily by their government.
The issue, as you’ve probably read about, including last week in the Herald, has to do with tax refunds people are receiving.
Or in some cases, not receiving.
Millions of middle-class taxpayers are likely to receive a smaller refund in 2019 than they did the previous year, even if their gross income didn’t change substantially. Some are having to pay rather than get a check back.
Wyden and other Trump critics have pounced on this to imply that Trump’s vaunted 2017 tax reform law was a sort of financial Trojan Horse.
The reality is the vast majority of taxpayers who have been or will be unpleasantly surprised by their 1040 form this year kept more of their earnings in 2018, which was of course the main selling point of the law.
In his press release, Wyden complained that the “Trump administration chose to under-withhold taxes from millions more Americans than is typical.” This suggests that federal agents are responsible for filling out taxpayers’ W-4 withholding forms.
In fact the IRS, back in April 2018, issued a press release urging several groups of taxpayers, including couples who have children or who both have jobs, to review their withholding, based on the new law, to ensure enough tax was withheld to prevent them from owing the government in 2019.
It’s clear that a lot of people either didn’t hear, or didn’t heed, this advice. This is hardly surprising, considering many people think about taxes only during refund season.
To his credit, Wyden was aware that changes in the law could affect taxpayers in ways they might not expect. On July 31, 2018, in responding to a government report showing that the withholding change could reduce, or eliminate, some taxpayers’ refunds in 2019, Wyden described the report as an “alarm bell.”
The senator might have made that alarm even louder by suggesting his constituents, many of whom were bringing home larger paychecks throughout 2018 due to the tax cut, plan ahead by saving some of that extra money they were receiving each payday.
But that would have made it more difficult for Wyden to lambaste Trump as he did this week, referring to the situation, in a laughably inappropriate analogy, as “tax penalty entrapment.”
The bottom line here is that for most taxpayers, regardless of whether their refund shrank or went away, they kept more of their earnings, and the federal government took less, than in 2017.
This is what the term “tax cut” means.
Wyden’s overbaked rhetoric notwithstanding, his call for the feds to waive late payment penalties for taxpayers who have a tax liability but who, in his words, “did not attempt to game the system,” is reasonable.
But the government has already taken steps to do just that. The IRS recently announced that taxpayers would be exempt from such penalties if they timely pay at least 85 percent of any tax they owe.
— Jayson Jacoby, Baker City Herald editor