Americans brace themselves for a harsh reality this tax season, as lower tax refunds reflect the dire state of the economy under Joe Biden.
With tax day having passed on April 18th, Americans filed their returns with great trepidation, as the Internal Revenue Service released data showing that tax refunds would be considerably lower this year.
The average tax refund issued by the IRS amounts to $2,878, a 9.3% decrease from $3,175 in 2021. The total amount of refunds has dwindled from $222 billion to $199 billion. This is a clear indication of a failing economy under the current administration. The Biden administration may claim that the new tax laws are intended to provide more benefits to low-income Americans, yet the repercussions of inflation and other economic instabilities are causing the middle class to suffer.
The Biden administration under the guise of pandemic relief has implemented various tax law changes that are not providing any relief to Americans. They have withdrawn stimulus payments and other tax benefits, which until recently provided some cushioning to households. By revoking these measures, the Biden administration has ultimately turned their backs on the people they claimed to be helping. The elimination of advance child tax credit has had a severe impact on many families, while taxpayers who did not receive stimulus checks are unable to claim a recovery rebate credit. This has caused a significant drop in the amount of tax refunds, wreaking havoc on household finances.
The inflation rate hit a record high of 5.0% in March 2023, according to data from the Bureau of Labor Statistics. This marks a dramatic escalation in the cost of living for the average American household. The real wages which consider the effect of inflation on nominal pay increases, fell 1.3% year-over-year as of March 2023. This has resulted in record pessimism regarding the state of the economy in the country. The American people are feeling the impact and increase of inflation and it has become a significant hurdle to their financial security.
Furthermore, current tax laws have sparked significant concern about more intense scrutiny for all taxpayers, especially the middle class. In recent years, audit rates for Americans earning between $25,000 and $200,000 have declined by 76%. However, with the newly enlarged agency, the IRS has raised concerns that they will implement more intense scrutiny for all taxpayers, especially with proposals to increase reporting compliance for individuals who earn tips, or to require Americans to report transactions above $600 made with payment settlement organizations like PayPal and Venmo. The middle class is feeling the burden of the government, and it is clear that they cannot afford more interference from the federal government in their financial lives.
This tax season and the lower tax refunds issued by the IRS serves as a somber reminder that the Biden administration’s economic policies are in total disarray. Inflation is at a record high, and the middle class is feeling the impacts the most. The Biden administration has turned its back on the American people by revoking benefits that provided a buffer to pandemic-related tax breaks. To make matters worse, the administration has implemented various tax law changes that only hurt taxpayers rather than helping them. The expansion of the IRS raises significant concerns about their increasing interference in the lives of average Americans, resulting in more scrutiny and audits. It is time to demand accountability from Joe Biden and his administration for their economic failures and formulate policies that benefit the middle class rather than harm them.
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