[Congressional Record Volume 165, Number 28 (Wednesday, February 13, 2019)]
[Senate]
[Page S1300]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                           Tax Filing Season

  Mr. GRASSLEY. Mr. President, I come to the floor for two reasons: No. 
1, to speak about the tax bill of 1 year ago, and then, for a longer 
period of time, to address the issue before the Senate, which is the 
nomination of Mr. Barr.
  The tax filing season began just over 2 weeks ago. Despite the 
disruption of the temporary partial government shutdown, the IRS is 
reporting to the Nation that all systems are go. Tax returns are being 
processed as normal, and refunds are being sent out. While there are 
lingering effects from the shutdown, overall, the IRS and Treasury have 
done a pretty good job of minimizing the effects of the shutdown on tax 
filers.
  This season is receiving additional scrutiny as it is the very first 
time that tax filers are filing under the tax cuts and reforms enacted 
last year. My colleagues on the other side of the aisle and some in the 
media appear to be obsessed with finding anything they can manufacture 
to declare the filing season under the new law a failure. Of course, 
that is after only 2 weeks of tax filing--not a long enough period of 
time to draw too many conclusions.
  Case in point: Last week the IRS released preliminary filing data 
covering the first weeks of the filing season. Immediately, naysayers 
began focusing on data that suggests that tax refunds in the first week 
were down slightly over last year, as well as focusing on anecdotal 
social media posts. Never mind that the current refund numbers are 
based on only a few days of data, or that refund statistics can vary 
widely from one week to the next. Never mind that most of the social 
media posts are unverified. Many have the markings of a coordinated 
effort by liberal activists who have regularly used hashtag ``GOP tax 
scam'' to attack the law on Twitter, despite a vast majority of 
taxpayers paying less in taxes.

  Yet our journalists, who are well educated and ought to know better, 
fall for it--hook, line, and sinker--including such tweets in articles 
with no questions asked or verifying the veracity of these claims.
  To be fair, oftentimes buried deep in such articles, well below a 
sensational headline, is an attempt to demonstrate some semblance of 
unbiased reports, noting that under the tax law, most taxpayers will 
see tax cuts. That is right. Most taxpayers will see tax cuts. You most 
assuredly wouldn't know this from the headlines bemoaning a reduction 
in tax refunds, but the vast majority of taxpayers experienced a tax 
cut last year, and will this year, as well.
  Every analysis--from the nonpartisan Joint Committee on Taxation to 
the right-leaning Tax Foundation, to the liberal Tax Policy Center--
demonstrates that taxpayers are sending less of their hard-earned money 
to Washington this year.
  As an example, an Iowa family of four with the State's family median 
income of around $75,000 stands to see their tax bill cut by more than 
half, or about $2,100 in savings. This is real tax relief that began 
appearing in many taxpayers' paychecks at the start of 2018. That is a 
very important point. The government could have chosen to deprive this 
taxpayer of this extra $2,100 last year until they filed their taxes 
during this tax season.
  This may have been the best thing to do if you are someone who starts 
with the assumption that their money would be better off in the hands 
of the government interest-free. But I do not believe that is the best 
thing to do.
  I believe taxpayers know better how to spend their hard-earned money 
than Washington does. It should be up to the individual taxpayer 
whether it is in his or her interest to put that extra $2,100--or about 
$175 a month--in a savings account or spend it on buying school 
supplies for their children or maybe even making a car payment. That is 
a decision 157 million taxpayers can make and not 535 Members of 
Congress or the bureaucrats who are out spending the money.
  In early 2018, Treasury and the IRS implemented updated withholding 
tables to give taxpayers that option of deciding whether to save or 
spend and what to spend it on or how to save it.
  A chief priority for the new withholding tables was accuracy. The 
IRS' goal was to help taxpayers get the right amount withheld from 
their paycheck. However, common sense ought to tell us that no 
withholding table will ever be perfect--at least not perfect for 157 
million different taxpayers. If they were, there would be no need for 
tax refunds. Only what was necessary to satisfy a taxpayer's tax 
obligation would need to be taken from their paychecks.
  But that is unlikely. Every taxpayer is affected a little differently 
under the Tax Code based on their personal circumstances, and some 
taxpayers' incomes may fluctuate throughout the year. This makes exact 
withholding based on general tables nearly impossible. As a result, the 
amount of a taxpayers' refund is unlikely to be exactly the same as it 
was under the old law compared to our new law. Yes, some taxpayers may 
see a smaller refund, but others may see a larger refund. The size of 
one's refund tells you nothing about whether a specific taxpayer 
benefited from last year's tax law.
  Given this fact, the best way for any taxpayer to see how tax reform 
affected their bottom line is to compare this year's tax return with 
last year's tax return, rather than making that judgment based upon 
what the refund is.
  Tax preparers and tax return software often will provide an analysis 
comparing the current and previous year's tax return. I encourage 
taxpayers to compare the total amount of taxes paid this year with the 
total taxes paid last year, or, if your income materially changed from 
last year, compare your effective tax rate. That is the taxes paid as a 
percentage of your adjusted gross income. If your tax preparer does not 
already provide you with this information, simply ask them for that 
information.
  If taxpayers take this approach, the vast majority will see that 
their tax bill has gone down. This is what matters, not the size of 
their refund. The size of the refund tells you nothing beyond the 
degree to which a taxpayer has overpaid their taxes over the course of 
the year. I hope Americans will take the time to check so they know the 
real effects that last year's tax cuts had on their lives and their 
family.