LETTER: Don’t complain: You received your tax refund in your paychecks

To Ozaukee Press:

The Joe Heller cartoon on the opinion page in the Feb 14  Ozaukee Press is misleading. It depicts a taxpayer complaining about a lower tax refund and Uncle Sam commenting that “Congress gave you a tax cut ... and changed your deductions to pay for it!”  The part that says “to pay for it” is misleading at best, and outright false at worst.

The tax bill that became law in 2018 effectively changed (lowered) individual and corporate income tax rates. It also eliminated and capped some deductions.  Generally, most wage earners’ federal income taxes were reduced in 2018 from what they experienced in 2017 and before that.

In order to implement this reduction, the IRS issued new payroll tax withholding tables in February 2018 that lowered the amounts withheld from paychecks during all of 2018.

What that means is that in each paycheck received from February through December of 2018, workers received more cash in their paychecks due to lower federal income tax rates. Check this out yourself.

Compare your W2 form from 2017 to that in 2018. Box 2 shows federal income tax withheld. 

I’ll bet Box 2 is lower in 2018 than in 2017 for almost everyone. That essentially is your share of the tax cut.

So why are refunds lower?  Simple, the amount withheld from each paycheck is smaller in 2018 than in previous years.  You essentially received your refund in each paycheck rather than having to wait until the next tax filing to receive it.

If you receive a smaller refund this year, thank yourself. You actually gave the government a smaller, no-interest rate loan than in previous years. Genius, you!

Tom Goedken
Port Washington