Tax season has come and gone and hopefully you received an income tax rebate. The important part of the tax season this year was President Trump’s One Big Beautiful Bill touted the cutting of income tax for regular people. The Democrats focus on tax cuts for billionaires. Both can be correct, but taxes and money are typically individual things that people like to keep in the family, so who was more correct?

In an article by Andrew Duehren of the New York Times News Service, the good news in the law of averages is the average tax refund is $3,521 according to the IRS which is roughly 11% higher than it was a year earlier. The bad news is the benefits are unevenly and to some tax experts, arbitrarily distributed. The reason is even if you can claim one of the new tax cuts, the savings reflect how much money they make. Someone who does not owe much in taxes gains little from a tax cut.

The New York Times spoke with 3 dozen Americans to understand how the tax cuts were reshaping their finances. In addition surveys were done by hundreds of people while others were interviewed as they waited at a tax clinic.

Many of the taxpayers said they had received their biggest refund in years, money that will go towards paying down credit card debt, catching up on bills, adding to savings accounts, covering the cost of a vacation. Among the biggest winners were high income earners and large companies, some did not gain much of anything.

According to the Tax Policy Center, roughly a third of Americans were not expecting to receive a new cut from the tax law. If you make less than $50,000, the tax refund is used to catch up on bills particularly heating and utility bills (about 30% of Americans are behind in their bills for the winter) and look to new purchases as the money will be spent.

The problem for under $50,000 is to pay for the tax cuts, the Republicans cut funding for health care, Medicaid, food stamps, and raised feeds on other government services. Is someone better off?

If you are between $50,000 and $150,000, technically you are in the middle class. Technically there is flexibility in the budget, but everything costs more and the tax cuts are similar to the amount received last year. The tax bill put a cap on overtime and tips payments, so it was not as much as expected. Bills that typically get paid from refunds include property tax, home owners insurance, and car insurance.

If you make over $500,000, then the refund is a nice surprise than can be used to buy new autos.

For corporations, many are the biggest beneficiaries and an example in the article is Amazon, it saved $8 billion in taxes last year.

Linking to dividend paying stocks, in all business, accounts receivable and write offs are important and no one likes to see them go up. In broad customer-based companies, people often get behind but something similar to a tax refund helps them give over the hurdle to pay their bills. It is something companies expect from past years of payments. For these types of companies is it important to pay to the accounts receivables.

There are more questions than answers, till the next time – to raising questions.