Tax refunds have increased this week, the Treasury Department announced Thursday, after critics attacked the initial lower refunds that resulted from Americans paying less to government coffers.
Through four weeks of the filing season, the average tax refund in 2019 increased to $3,143—up from last week’s average of $2,640, according to the Treasury Department.
Treasury Secretary Steven Mnuchin says refunds are bouncing back.
“People have been very focused on tax refunds,” Mnuchin told CNBC. “Tax refunds are up 17 percent week over week. That basically gets us to the same level as last year.”
The 2017 Tax Cuts and Jobs Act slashed individual income and corporate tax rates, but closed numerous tax loopholes. Closing loopholes meant lower refunds for some.
The refund number might not be something to get excited about, warned Adam Michel, senior fiscal policy analyst for The Heritage Foundation.
“The breathless reporting when tax refunds were slightly down is just as worthless as talking about this most recent release or Mnuchin’s statements,” Michel told The Daily Signal, adding:
The important point to remember is that 90 percent of Americans got a tax cut. It is likely that more Americans will also get larger refunds, but the two are not connected and the preliminary data from the IRS should not be overinterpreted.
What we should really be talking about is how destructive the tax withholding system is to Americans’ perception of how much the government costs them each year. This episode highlights why we should not have a system of mandatory withholding.
Much of the increase in refunds is a result of the remainder of the earned income tax credits and child tax credits being paid out this week, according to the Treasury Department.
The average refund at this point in the filing season is now up 1.3 percent over last year. That’s based on 47.7 million individual returns processed in 2019 compared with 49.2 million returns in 2018, according to the Treasury Department.