For days, the broadcast networks have been warning of a nation in “turmoil,” with “outrage” and downright “panic” sweeping across the country. The source of the crisis? Last year’s tax reform law that allowed Americans to keep more of their own money. In short, the media were aghast that some taxpayers were getting smaller refunds or even owing money to the IRS after having less money taken out of their paychecks throughout the year.
“President Trump touting his middle and working class tax cuts during the State of the Union address, but this morning, some Americans who have filed their taxes early are getting a rude awakening,” correspondent Tom Costello fretted on Monday’s Today show. The headline on screen during the NBC report blared: “Taxpayers’ Refund Revolt; Millions Getting Hit With Surprise Tax Bills.”
As the reporter talked to people on the street outside of a tax preparer’s office, one woman lamented that she would have to put a vacation on hold due to her smaller refund while another complained: “I might have to take money out of an IRA to pay my taxes thanks to the Trump administration.”
Costello also turned to social media for unverified claims: “Some Twitter users venting their frustrations online. ‘My tax refund is half of last year’ and ‘Last year I got a $750 federal refund. This year I owe $5,000.’”
Only at the end of the segment did he actually explain why some people may be seeing tax bills or shrinking refunds:
...the amount of local and property taxes you can deduct on your federal taxes is now capped at $10,000, so if you pay more than that, you can’t deduct any more than that on your taxes. And importantly, most experts say, listen, getting a big refund is usually not a good thing because it means you have been overpaying your taxes and giving the government an interest-free loan.
On Tuesday, ABC’s Good Morning America picked up the story, with co-host Michael Strahan warning of “growing anger over shrinking tax refunds.” Like Costello, the anchor touted: “It’s the first tax season since President Trump’s new plan went into effect and people are flocking to social media to complain they’re not getting back as much money as last year.”
The on-screen headline sounded the alarm: “Tax Return Outrage; Shrinking Refunds Spark Growing Anger.”
In the report that followed, correspondent Rebecca Jarvis hyped:
Yeah, most look forward to that refund check, some even rely on it. But so far this year, many of those who’ve received tax refunds in the past aren’t getting them and some are even having to pay extra....On social media, thousands are using #TaxScam and #NeverOwedBefore. One woman writing on Twitter, “I always got a small refund. I owe $300 this year. So yeah.....#TaxScam.”
Like NBC, she waited until the end of the segment to provide important factual context: “Okay, so what explains the smaller refunds this year? According to the Tax Policy Center, most Americans, about 80%, did get a tax cut in 2018, but those savings showed up in paychecks because the IRS changed its withholdings this year...”
Despite the clear explanation, Strahan remained puzzled: “Okay, so reality check, 80% of Americans received a tax cut. Why are refunds smaller?” Jarvis reiterated: “Think about it like this, if you got $40 extra in your paycheck each week, that would be about a thousand dollars more over the course of a year. Instead of seeing it in the refund check, you got it in the paycheck, but might not have noticed it along the way.”
Tuesday’s CBS This Morning also covered the topic, but Business Analyst Jill Schlesinger stuck to the facts and avoided hyperbole:
...we are talking one week of data. So let’s be clear that a lot of people were surprised at this first week. Now, we’re expecting around 80% of Americans will see lower taxes in 2018 than they did in 2017. The problem is, that many of those people may have already gotten those refunds. How? Through their withholding. And when employers adjusted withholding, people may have had more money come to their bottom line. Part of that was potentially your tax savings. So if you get a smaller refund, you may have missed the fact that you’ve gotten a lot of it already.
She even advised viewers: “Really, a refund – I know people think it’s for savings – but you’ve just extended an interest-free loan to Uncle Sam for the year. And I’ve got a feeling you could use that money better than your uncle can.”
Co-host Gayle King was more interested in fearmongering than facts, citing one anonymous account: “I saw an interview with a guy who was very irate because he said last year he got $10,000 back, this year he has to pay $10,000. Is that all a matter of withholding? Is that what this is for him?”
Schlesinger replied: “I think that’s an extreme case. And I don’t think we’re going to see as many stories. You’ll hear about them, I think those are people who come from a high-tax states.” Moments later, King interjected: “But it doesn’t feel like it’s an extreme case when it’s you.”
On Wednesday, NBC’s Today show actually returned to the story to amp up the rhetoric. Appearing again on the morning show, correspondent Tom Costello proclaimed: “For many people who forgot about the new tax plan, it’s a time of high stress....tax season 2019 has got a lot of Americans in a panic, learning they unexpectedly owe money to the IRS or their refund isn’t what they expected.”
The headline on screen added to the “stress” and “panic”: “Tax Change Turmoil; What You Should Know as Millions Get Unwelcome Surprise.”
Costello highlighted: “With three kids in college, the Edny family is now scrambling. Last year they got a $10,000 refund, but because of high property taxes, this year they owe $10,000.” A soundbite ran of the mother of the family bemoaning: “We had no idea that this is coming. And I feel terrible for families that are gonna have the same shock, that we had. That that refund check we thought was coming will not be.”
Despite the logical mathematical reason for some Americans getting smaller refunds or having a tax bill after paying less in taxes throughout the year, the networks offered screaming headlines of “revolt,” “outrage” and “shock.” While calm explanations were eventually given, they were treated more like afterthoughts, or in the case of CBS, pushed aside in favor of more dour hand-wringing.
When it comes to taxes, the liberal media are eager to spin any reduction as bad news, even when the numbers tell a different story for the vast majority of taxpayers.
Here is a full transcript of the February 12 report on ABC’s GMA:
7:16 AM ET
MICHAEL STRAHAN: And we’re going to switch gears now to the growing anger over shrinking tax refunds. It’s the first tax season since President Trump’s new plan went into effect and people are flocking to social media to complain they’re not getting back as much money as last year. Rebecca Jarvis is here with more. Rebecca, what is behind this?
REBECCA JARVIS: Good morning, Michael. Guys, good to see you. Yeah, most look forward to that refund check, some even rely on it. But so far this year, many of those who’ve received tax refunds in the past aren’t getting them and some are even having to pay extra.
[ON-SCREEN HEADLINE: Tax Return Outrage; Shrinking Refunds Spark Growing Anger]
According to the IRS, the average refund is down more than 8%, about $170 from last year. The government shutdown also delaying some filings, with the total number of returns down 12.4% from last year in the first official week of tax season. Eva Sieupersad, who works at a non-profit, says she owes on this year’s tax returns.
EVA SIEUPERSAD [TRAINING COORDINATOR]: In past years, I’d get about a thousand or 1,500 back so that I can pay my property taxes. And this year, I just don’t have a refund to pay.
JARVIS: On social media, thousands are using #TaxScam and #NeverOwedBefore. One woman writing on Twitter, “I always got a small refund. I owe $300 this year. So yeah.....#TaxScam.”
The Treasury Department firing back, calling the reports “misleading,” writing, “Refunds are consistent with 2017 levels and down slightly from 2018 based on a small initial sample from only a few days of data.”
Okay, so what explains the smaller refunds this year? According to the Tax Policy Center, most Americans, about 80%, did get a tax cut in 2018, but those savings showed up in paychecks because the IRS changed its withholdings this year, Michael.
STRAHAN: Okay, so reality check, 80% of Americans received a tax cut. Why are refunds smaller?
JARVIS: So basically in those paychecks people got a little bit more. Think about it like this, if you got $40 extra in your paycheck each week, that would be about a thousand dollars more over the course of a year. Instead of seeing it in the refund check, you got it in the paycheck, but might not have noticed it along the way.
STRAHAN: Thought you were getting there and at the end of the year.
JARVIS: People like that little refund, yeah.
GEORGE STEPHANOPOULOS: Okay, Rebecca, thanks very much.
Here are excerpts of the February 12 coverage on CBS This Morning:
8:04 AM ET
BIANNA GOLODRYGA: Millions of Americans could receive smaller checks after filing their 2018 tax returns. The average refund is down more than eight percent compared to the same time last year according to the IRS. So to clear up some of the confusion, we’re joined by CBS News Business Analyst Jill Schlesinger.
(...)
GOLODRYGA: Jill, it’s the first tax season since the President’s tax cuts went into effect, how is that impacting refunds?
[ON-SCREEN HEADLINE: Shrinking Refunds?; Tips on Filing and the Best Way to Use Tax Refunds]
JILL SCHLESINGER: Well, so far – and I just want to say “so far” – we are talking one week of data. So let’s be clear that a lot of people were surprised at this first week. Now, we’re expecting around 80% of Americans will see lower taxes in 2018 than they did in 2017. The problem is, that many of those people may have already gotten those refunds. How? Through their withholding. And when employers adjusted withholding, people may have had more money come to their bottom line. Part of that was potentially your tax savings. So if you get a smaller refund, you may have missed the fact that you’ve gotten a lot of it already.
(...)
SCHLESINGER: Really, a refund – I know people think it’s for savings – but you’ve just extended an interest-free loan to Uncle Sam for the year. And I’ve got a feeling you could use that money better than your uncle can.
GAYLE KING: I saw an interview with a guy who was very irate because he said last year he got $10,000 back, this year he has to pay $10,000. Is that all a matter of withholding? Is that what this is for him?
SCHLESINGER: I think that’s an extreme case. And I don’t think we’re going to see as many stories. You’ll hear about them, I think those are people who come from a high-tax states. If they were high-tax states like New York, New Jersey, Connecticut, California, your deductions for your state and local taxes were limited to $10,000. Those are the people who are at risk. About 5% of taxpayers will likely pay more this year than the previous year. And most of those folks, I believe, are gonna come from those high-tax states with limitations on their deduction.
KING: But it doesn’t feel like it’s an extreme case when it’s you.
SCHLESINGER: Oh, of course not. Of course not.
(...)
Here are excerpts of the February 13 coverage on NBC’s Today:
7:20 AM ET
HODA KOTB: Plus, the growing uproar over tax returns. Families hit with much smaller returns or even bills. What you need to do this morning to avoid a big surprise when you file right now and next year.
[ON-SCREEN HEADLINE: Tax Change Turmoil]
(...)
7:37 AM ET
SAVANNAH GUTHRIE: Do you have a fear of filing? A lot of Americans are getting smaller tax refunds, maybe even bills from the IRS this year. We’ll explain why.
(...)
7:42 AM ET
CRAIG MELVIN: This morning, some growing concerns over tax day. The first since the new tax law took effect.
KOTB: Yeah, we’ve told you about earlier filers who’ve reported their surprise at finding their refunds aren’t higher or actually they owe money to the IRS. So what are you going to do about it? NBC’s Tom Costello has been checking this one out. Hey, Tom, good morning.
TOM COSTELLO: Good morning, guys. So a reminder, this was the biggest tax overhaul in 30 years, nearly everybody affected in some way. Simplified filings, lower taxes withheld from your paychecks, or bigger tax bills because of where you live. For many people who forgot about the new tax plan, it’s a time of high stress.
[ON-SCREEN HEADLINE: Tax Change Turmoil; What You Should Know as Millions Get Unwelcome Surprise]
This morning, tax season 2019 has got a lot of Americans in a panic, learning they unexpectedly owe money to the IRS or their refund isn’t what they expected.
(...)
COSTELLO: 80% of Americans are paying lower taxes this year since the standard deduction doubled. But many people say they didn’t notice anymore money in their paychecks last year as other costs, like insurance, increased. If your employer took out less money for taxes in 2018, that could mean a lower refund. So far, refunds are down 8% this year compared to last.
Meanwhile, if you live in a high-tax area, you could actually owe money. Here’s why: In years past, you could write off all your state, local and property taxes. Now that deduction is capped at $10,000 total. While the standard child deduction has doubled to $2,000, children over 17 are no longer counted as tax credits. And moving expenses are not deductible.
With three kids in college, the Edny family is now scrambling. Last year they got a $10,000 refund, but because of high property taxes, this year they owe $10,000.
UNIDENTIFIED WOMAN [EDNY FAMILY]: We had no idea that this is coming. And I feel terrible for families that are gonna have the same shock, that we had. That that refund check we thought was coming will not be.
(...)
