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Ron Wyden gave a speech today on the Senate floor about the tax withholding gambit (see here theintercept.com/2019/02/06/tax…). Some excerpts:
Wyden: "2018 was an election year. The Trump Treasury Department had a shiny new tax law on its hands, and there’s no question they wanted people to like it."
"It sure looks like the Trump administration decided to put politics first, lowball the estimates of how much tax should be withheld from everybody’s paychecks, and lure people into the false sense of security that they’d gotten a big tax cut, courtesy of Donald Trump."
"The Trump administration buying people off with their own money- that’s what you’re talking about here. It’s as if the Trump administration figured when the other shoe drops & people are hit with penalties for underpayment, it’ll be spring 2019 & the election will be behind us."
"It could cause a lot of pain this spring when people who typically get a big refund suddenly learn they OWE the government a check"
"You’re potentially talking about millions and millions of Americans -- way more than is normal -- finding out that the government’s been goosing their paychecks with tax trickery, and now they’re getting hit with a big tax bill."
Wyden also knocked Treasury/IRS for trying to get workers to change the withholding themselves, effectively outsourcing their job: "People have lives to live. They’re not spending the first weeks of the new year crunching the numbers on tax withholding."
Wyden's bottom line is to waive all penalties for taxpayers who paid far too little in withholding in 2018: "Nobody should be penalized for the Trump administration’s mistakes on tax withholding. Change the penalty thresholds. Extend safe harbors. Whatever needs to happen."
