Efforts to popularize tax bill, increase take-home pay may put people in government's debt, says Rep. Richard Neal

January 10, 2018
In The News

An easy way of popularizing the just-passed GOP tax bill would be to ensure a large number of Americans see a big boost in take-home pay.

Conveniently timed to hit people's paychecks just ahead of the 2018 midterm elections, such a development could provide key stability to Republicans, who are expected -- in early projections, based as much on historic precedent as particular circumstances -- to suffer moderate to severe losses in Congress.

The temptation there and with Republicans running the government, U.S. Sen. Ron Wyden and U.S. Rep. Richard Neal have issued a warning to the administration not to get cute with numbers, or risk breaking the budgets of lower-income Americans.

"We oppose any attempts by the administration to systematically under-withhold income taxes during the 2018 tax year, knowing that in 2019 taxpayers may find they owe taxes when they were expecting a refund," the two lawmakers, the top Democrats in the Senate and House on taxes, wrote this week. 

Continued the statement, encouraging such "phantom windfalls" could result in lower-income people accustomed to seeing an annual refund from Internal Revenue Service instead end up with unexpected bills, and potentially no means to pay them. Workers could start seeing the effects of the tax bill, signed into law by President Donald Trump last week and dubbed the Tax Cuts and Jobs Act, show up on their paychecks as early as next month. 

The IRS is presently at work on "withholding tables" intended to be used to implement the tax reform, and calculate how much to leave and how much to take from workers' paychecks and is reportedly being pressured to take as little as possible from players in the Republican political establishment.