The Internal Revenue Service says individual tax refunds issued so far are only slightly smaller than last year, raising questions over whether this will have an impact on consumer spending.
Continue Reading Below
But National Taxpayers Union executive vice president Brandon Arnold said tax incentives are better for the U.S. economy.
“What’s more important is using the tax code to incentivize decisions like investment, like savings and things like that. And that’s what we’ve seen since this tax reform bill took effect at the beginning of last year,” he said on FOX Business’ “Cavuto: Coast-to-Coast” on Monday. “We’ve seen more investing in the United States economy, and that’s why we’ve seen strong job numbers, strong economic performance.”
Tax refunds this year are down by $6 billion according to the IRS, however, 1.6 million fewer people are receing refunds. The average tax refund this year is $2,873, which is $20 less than last year. “The key here is your overall tax liability relative to last year, not where your refund stands from this year to last year to previous years because at the end of the day that is just a reconciliation between what you’re expected to owe and what you are paying throughout the course of the year and what you actually owe when you sit down to do your taxes in April as many of us do,” Arnold said.
The National Taxpayers Union executive said, although more people are seeing smaller refunds and some may not even receive one, the majority of taxpayers are getting a tax reduction compared to the previous year.
“And sure there are more people now that are seeing smaller refunds or maybe not even getting a refund at all. But if they go back and compare their tax liability - their 2017 tax liability to their 2018 tax liability, 80-90% of those folks are actually getting a tax reduction and that’s a positive thing,” Arnold said.
He also noted that lowering the corporate tax has led to U.S. job growth.
“In terms of growth, in terms of the job numbers that we’ve seen with nearly 200,000 jobs created in last month alone, a lot of that is attributable to the corporate tax rate reduction that incentivized American companies to invest, to do business here in the United States rather than moving their headquarters or operations overseas.”