Natural Resources Management Act

Floor Speech

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Mr. WYDEN. Mr. President, the first tax filing season under President Trump's mess of a tax law is upon us, and it looks like a whole lot of chickens are coming home to roost.

Republicans jammed their tax bill through Congress at record speed-- pile driver legislating. The Trump tax bill was signed into law with a whopping 9 days to go before the 2018 tax year was set to begin, and after all of that land speed record timing, there were bound to be serious problems. There is a big one now that lots of Americans are reportedly waking up to, and they are waking up now that the tax filing season has arrived. The big tax refunds that Americans have gotten used to could be goners now that Trump's tax changes are the law of the land and many Americans might owe the government money.

As the ranking Democrat on the Senate Finance Committee, I am very troubled about the prospect of what is ahead, and I want to lay out my concerns. Here is what this is all about.

Most Americans have their taxes withheld from each paycheck, and the Treasury redoes the math on withholding every year. Obviously, the math gets more complicated when Congress passes legislation like President Trump's tax law, which, in effect, triggers a tax policy earthquake. The outcome of these decisions about how much to take out of everybody's paycheck is clearly going to have a big impact.

Here is where it looks like things went wrong, where it looks like the Trump team decided to score short-term political wins instead of to protect Americans from financial harm.

In election year 2018, the Trump Treasury Department had a shiny, new tax law on its hands, and there is no question it wanted it to impress. It sure looks like, back in December 2017, the Trump administration decided to put politics first--to lowball the estimates of how much tax should be withheld from everybody's paycheck and lure Americans into a false sense of security that they had gotten big tax cuts that were courtesy of Donald Trump.

The prospect of the Trump administration's buying American taxpayers off with their own money is what you are talking about here. It is as if the Trump administration figured, when the other shoe dropped and people were to be hit with penalties for underpayment, well, it would be springtime 2019, and the 2018 election would be behind us. It could cause a lot of hurt this spring when people who typically get big refunds suddenly learn that they owe the government a check. Americans, understandably, want their taxes to be simple and straightforward and routine. Whether it is a few hundred or a few thousand dollars, you can understand why people would count on getting refunds when they have gotten the same amount back for years and years.

I have talked to folks all over my State about this. I have townhall meetings in every county--90 minutes, open to everybody. I don't give any speeches. I am just there to let people tell me what their takes are with respect to what is going on back here and what they think we ought to be doing. Oregonians are asking about the issue of whether or not they are going to owe money. The first thing they say is that it is their money, that these are refunds on taxes that have been taken out of their paychecks. We are talking about middle-class folks, working families, who use their refunds to pay the bills, to help cover tuition for a child, or to put a downpayment on a new car one has been needing for ages.

Here is the truth. The Trump administration did not need to put anybody in this situation. It had the option of delaying these withholding changes by a year to make sure nobody took a hit.

While it was making this decision in January of 2018--just days after the law was enacted--the Democrats in this body and in the other body were sounding the alarm on what sort of danger was possible this spring. I and Chairman Neal, of the House Ways and Means Committee, wrote to the Government Accountability Office. In representing the Democrats in this body and in the House, the two of us asked what kind of impact this rush job was going to have on working Americans who have their income taxes withheld from every paycheck. The Government Accountability Office responded to Chairman Neal and me 7 months later.

According to the Government Accountability Office's analysis, after the Trump tax law enactment, nearly 30 million Americans will find that they will have underpaid their taxes in 2018. That is millions more Americans than before the new tax law, which is way out of line with numbers that you would typically see. Those are the Americans who are in line for a shock when they file their tax returns this year.

Here is what the Treasury Department is going to say. It will claim it chose the withholding figures that would do the least amount of harm. Yet that just doesn't pass the smell test, not when it chose numbers that underwithheld taxes at far higher rates than usual. You are potentially talking about millions and millions of Americans--way more than is normal--finding out that the government has been goosing their paychecks with tax trickery, and now they are going to get hit with big tax bills. The Treasury Department, I am sure, is going to say it updated the official IRS--Internal Revenue Service--withholding calculator and sent out new withholding forms for employers, but none of that was released until February 28--2 months into the new tax year.

Furthermore, let's be realistic about the prospect of Americans flocking to the Internal Revenue Service's withholding calculator. The taxpayers who will be potentially affected by this underwithholding issue will be parents with jobs to do and kids to look after. How can you expect those people to have spent a whole lot of time doing tax math at the beginning of 2018 in order to head off a problem they didn't know anything about and that might show up in a filing season more than a year later? Our working families have lives to lead. They are not spending the first weeks of a new year crunching the numbers on tax withholding.

That is why I wrote to the Internal Revenue Service's Commissioner, Mr. Rettig, before anybody up here had really begun to see the challenge. I encouraged the Commissioner to waive penalties for 2018, to waive tax penalties for this year. I made the case that it was the first year of a new tax law--he was not involved in writing it--that was jammed through the Congress and enacted in way too precipitous a manner. Hard-working families should not suffer the harmful consequences of political gamesmanship on taxes. Instead of replying and working with me to find a solution, Commissioner Retting went ahead and said that the best the Internal Revenue Service could do is adjust the threshold where penalties kick in. Instead of penalizing those who paid less than 90 percent of what they owed in 2018, he decided that they would penalize those who paid less than 85 percent. There is no question that is a modest step in the right direction, but it is my judgment that the Internal Revenue Service ought to do more and keep it simple.

As we look at the events of the upcoming weeks, here is my bottom line: I believe it is time for the Trump administration to say that nobody will be penalized for the Trump administration's mistakes on tax withholding, change the penalty thresholds, extend the safe harbor--do whatever it takes to make sure that our people are held harmless with respect to what could otherwise be penalties for the Trump administration's mistakes on tax withholding.

Down at the Treasury Department, there are a lot of people with expensive degrees hanging on their office walls. I would like to see them put some of that brain power to work now helping to protect middle-class families.

My bottom line is that nobody ought to be penalized for the Trump administration's mistakes on tax withholding.

After Republicans and this administration teamed up on a $2 trillion tax giveaway that overwhelmingly benefits multinational corporations and those at the very top, those who are particularly powerful in America, protecting our working families from tax policies is the least the government can do. Otherwise, it sure looks like a lot of middle- class families are going to be justifiably outraged. I know, because they are coming up to me. They are coming up to me here in this city, and I know that when I have town meetings next week at home in Oregon, I am going to hear a lot about this. I believe that a lot of middle- class families are going to be justifiably outraged. I wouldn't blame them.

I want it understood that I believe the next step is for the Trump administration to move to make sure that nobody is penalized for the Trump administration's mistakes on tax withholding.

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