Grassley on the Conclusion of Tax Filing Season
Remarks by U.S. Senator Chuck Grassley of Iowa
Senate Finance Committee
On the Conclusion
of Tax Filing Season
Wednesday, May 1,
few weeks ago, the tax filing season came to an end.
filing season was an important mile stone as it was the first under the Tax
Cuts and Jobs Act (TCJA).
Democrats sought to turn the filing season into an indictment of the tax reform
through a campaign of misinformation and half-truths.
were obsessed with finding anything they could hang their hat on to declare the
filing season a failure.
in point, they attempted to use early and incomplete tax refund data to mislead
taxpayers into believing that since average tax refunds were down, their taxes
must be up.
course, such a claim was always hogwash.
size of a tax refund tells you nothing about a taxpayer’s overall tax
merely tells you by how much a taxpayer has overpaid the federal government
throughout the year.
Washington Post fact checker called out Democrat tax-refund falsehoods as being
“nonsensical and misleading.”
talking points earned them a whopping four Pinocchio’s.
they wouldn’t let facts or reason get in their way.
continued to mislead and scare the public for several more weeks.
more complete tax refund data came in showing that average tax refunds were
actually in-line with previous years.
to Democrats’ chagrin, their favorite talking point was once and for all
exposed as nonsense.
fact is this filing season was a resounding success for the Tax Cuts and Jobs
filing season ran remarkably smoothly.
became more clear the further into the filing season we went and a more
complete picture emerged.
the IRS’ computer systems functioned as planned.
were processed in a timely manner.
total number of refunds sent to taxpayers are up and the average refund amount
differed by only $55 compared to last year.
importantly, millions of middle-income taxpayers saw less of their hard-earned
money go to Washington.
Democrats remain as determined as ever to take down tax reform through a
campaign of misinformation.
years they’ve misled the American people and promoted a narrative full of
distortions and misrepresentations about what the law does and doesn’t do.
when the bill was little more than a one page outline, Democrats began their
campaign to peg tax reform as a giveaway to the wealthy and a tax hike for the
we drafted, discussed new ideas, and crafted the final bill, it evolved considerably
from the initial framework.
the Democrats talking points never changed.
after analysis, ranging from the non-partisan Joint Committee on Taxation (JCT)
to the liberal Tax Policy Center, showed tax reform would cut taxes on average
for every income group.
analyses showed that to the extent there were tax increases, they were largely
concentrated among the wealthy.
right, the taxpayers Democrats claim were the big winners in tax reform are
actually the ones most likely to see a tax hike.
according to JCT’s analysis, the largest percentage tax cuts are concentrated
among low to middle-income taxpayers.
analysis also shows that tax reform made the tax code more progressive.
now shoulder an even larger share of the total tax burden than under prior law.
Democrats are determined to not let these facts get in their way.
the beginning, they have argued up was down – that tax cuts were tax increases
– and even suggested the bill’s passage was a sign of “Armageddon.”
their constant drumbeat, coupled with little pushback from the mainstream
media, has worked to mislead too many taxpayers.
there are signs some in the media are starting to see the Democratic talking
points for the nonsense they really are.
few weeks ago, the New York Times, of all papers, published an article
highlighting how Democratic talking points – and far too many American’s
perceptions of the law – don’t match reality.
have here a chart used in the article.
compares the liberal Tax Policy Center’s analysis of taxpayers receiving tax
cuts under the individual income provisions of the law with a recent survey of
taxpayers who think they received a tax cut.
you can see, there is a large gap between how many taxpayers actually received
a tax cut and those who think they did.
on the Tax Policy Center analysis, nearly 70 percent of Americans earning
between $30,000 and $50,000 saw a tax cut, but only about 36 percent think they
got a tax cut.
more than 80 percent of Americans earning between $50,000 and $70,000 received
a tax cut, but only about half that amount – 40 percent – think they got a tax
the gap between perception and reality continues as you go up the income scale.
about half as many people who actually got a tax cut, think they did.
noted in the New York Times, “[t]o a large degree, the gap between perception
and reality on the tax cuts appears to flow from a sustained – and misleading –
effort by liberal opponents of the law to brand it as a broad middle-class tax
applaud the New York Times for finally calling Democrats out for their effort
to mislead the American public.
even in this article, the New York Times was selective in its reporting.
paper chose to highlight only the Tax Policy Center’s analysis of the
“individual income tax” provisions rather than its analysis of ALL major tax
provisions enacted in the Tax Cuts and Jobs Act (TCJA).
the liberal Tax Policy Center recognizes the person who has the legal burden of
paying a tax isn’t necessarily the one who bears the economic incidence of that
instance, it’s widely recognized that a portion of the corporate tax ultimately
falls on employees in the form of reduced wages.
when all major provisions of tax reform are considered, the percentage of
taxpayers receiving a tax cut is not 70 percent as reported, but 80 percent.
when you look at taxpayers with incomes between $50,000 and $70,000 the
percentage receiving a tax cut climbs to 90 percent.
ask unanimous consent to insert into the record the complete Tax Policy Center
analysis of Americans receiving a tax cut under tax reform.
hope that the New York Times article is a wake-up call to congressional
Democrats to abandon their misleading rhetoric.
it’s more likely they will continue their campaign of misinformation.
as more and more hard data comes in on the benefits of tax reform, it will
become harder and harder for the American public to take them seriously.
tax filing season behind us, we are finally starting to get some of this hard
Block has released data for this filing season based on their experience
helping taxpayers during this filing season, which demonstrates how taxpayers
fared in each state.
you can see from this chart, taxpayers in red and blue states alike all
benefitted from tax reform.
average for all states, taxpayers saw a 24-percent reduction in their tax bill.
data directly contradicts misleading arguments by some Washington Democrats
that tax reform was an attack on high tax blue states due to the cap on the
state and local tax (SALT) deduction.
of the largest tax reductions actually are found in high tax blue states
according to this H&R Block data.
average taxpayers in New Jersey saw the largest reduction in their tax bill at
29 percent, Massachusetts was the second largest reduction at 27.6 percent, and
California was the third largest at 27.1 percent.
fact is, on average, taxpayers in every state benefitted from tax reform.
in some cases, high tax blue states fared even better than red states.
am proud of the work we did on tax reform.
bill is perfect, and we still have work to do to address a number of technical
we kept our promise to enact meaningful reforms that cut taxes for the
more important is what tax reform means for long-term economic growth.
doesn’t take a tax expert to see income, wages, jobs and unemployment numbers
have all improved since the enactment of the TCJA, reflecting significant
benefits obtained by American workers.
that’s on top of the direct tax relief that hard working individuals and
families are already receiving, which I described at the start.
growth in real after-tax personal income averaged 2.5 percent during the Obama
administration; it has averaged 3.3 percent following tax reform.
growth in real average hourly earnings averaged a mere 0.6 percent under
President Obama compared to 1.7 percent following the enactment of tax reform.
job gains averaged 110,000 under President Obama; they’ve averaged 215,000
after the TCJA.
have been nearly 5.4 million jobs created since January 2017, with more than
half of that job creation having occurred since the enactment of tax reform.
President Obama, the unemployment rate averaged a whopping 7.4 percent.
averaged 3.9 percent after the enactment of tax reform.
tax reform and for the first time since 2001, the number of job openings in the
national economy exceeded the number of unemployed Americans.
phenomenon that has continued for the past year. That means an American who
wants a job can find one.
say it simply, tax reform is working for all Americans.
Democrats to suggest otherwise is nothing more than their continued effort to
mislead the American public.
invite them to take a page from the New York Times, acknowledge the facts, and
work with us to continue improving the economic environment for hard working
individuals and families across the country.
yield the floor.