"Fox & Friends" had a big laugh on Thursday at the expense of Americans who are unpleasantly surprised at their diminished tax refunds, after assuming returns would be larger due to President Donald Trump's tax cuts.
Charles Payne, the host of "Making Money with Charles Payne" on the Fox Business Network, appeared on "Fox & Friends" to discuss the plight of Americans who are upset about a drop in their tax refund. The segment opened with the statistic that there has been an 8.4 percent decline in the average tax refund compared to 2018.
"Here’s the thing: For the most part, the IRS is telling everyone that they just simply did not make the proper adjustments on their withholdings at the beginning of the year. So they have been making all of this money," Payne explained to the "Fox & Friends" hosts. After clarifying that either they or their employers might have made the mistake, Payne insisted that the IRS wasn't to blame here.
"IRS actually put a lot of memos out. They even made it pretty easy to go on their website and figure it out. This was at the beginning of last year. Of course most people didn’t do that," Payne explained. "While people were obviously seeing fatter paychecks they were still counting on that refund they always got, which is interesting because, you kind of hinted at it, that we would allow the IRS to have like a $2,000 loan, our money, right? Hold on to it because we overpaid. So people should probably consider making these adjustments anyway, unless you want to give the IRS two or three grand of your money to hold for a year. Maybe they can make the interest on it and you won’t."
At that point Brian Kilmeade chimed in to say, "But here's the problem: There are certain things that are gone forever and that is, in these blue states — in Illinois, in New York as well as Los Angeles, New Jersey (forget Los Angeles, also California) — you can no longer write off state and local taxes."
He added, "So that's gone."
Payne acknowledged Kilmeade's observation and claimed, "These states have put themselves in a bad predicament because they have taxed their residents, they have created these obligations, they have made these promises and they need to find out some of the taxes that they can probably address rather than going back to the government and asking someone in Mississippi to subsidize a millionaire in New York City's — to subsidize their mortgage. It's ridiculous."
According to a report by the Tax Policy Center in December 2017, the Trump tax cuts would cause a decline on average for all income groups that would nevertheless be disproportionately felt by the wealthy.
"Taxpayers in the bottom quintile (those with income less than $25,000) would see an average tax cut of $60, or 0.4 percent of after-tax income," the Tax Policy Center explained. "Taxpayers in the middle income quintile (those with income between about $49,000 and $86,000) would receive an average tax cut of about $900, or 1.6 percent of after-tax income. Taxpayers in the 95th to 99th income percentiles (those with income between about $308,000 and $733,000) would benefit the most as a share of after-tax income, with an average tax cut of about $13,500 or 4.1percent of after-tax income. Taxpayers in the top 1 percent of the income distribution (those with income more than $733,000) would receive an average cut of $51,000, or 3.4 percent of after-tax income."