The IRS is not supposed to operate in a partisan fashion when collecting taxes. But that doesn’t mean that partisans aren’t pressuring them when it comes to implementing the Republican tax plan, and the first step the agency will be taking is determining just how to adjust withholding rates on American paychecks. Politico:
The agency is under pressure to take as little as possible so people will see big increases in their take-home pay ahead of this year’s midterm elections.
But that would come at a cost: smaller or even nonexistent refunds next year, though millions rely on them to plug holes in their family budgets. Democrats are already accusing the Trump administration of plotting “phantom windfalls” ahead of the November contest that will come back to haunt taxpayers next tax season.
Got that? The more the agency reduces withholding taxes to reflect new tax rates, the more difference workers will see in their paychecks, but the smaller next year’s refund checks will be. And due to the weird peculiarities of human behavior, people like getting big refund checks; getting smaller refunds make them surly, even though from an economic standpoint that’s not what they should be hoping for.
While there is certainly some wiggle room for the agency to cheat the numbers one way or the other, it would be a dangerous thing to do and is therefore unlikely. But for the agency, it’s not quite as simple as just fiddling with a few numbers to determine what new withholding rates should be.