In This Episode
- Check out Vanessa’s book – brookings.edu/books/the-price-of-democracy/
- Call Congress – 202-224-3121
- Subscribe to the What A Day Newsletter – https://tinyurl.com/3kk4nyz8
- What A Day – YouTube – https://www.youtube.com/@whatadaypodcast
Follow us on Instagram – https://www.instagram.com/crookedmedia/
TRANSCRIPT
Jane Coaston: It’s Thursday, February 19th, I’m Jane Coaston, and this is What a Day. The show that learned President Donald Trump was hosting a Black History Month event on Wednesday and thought, I wonder how stupid it will be.
[clip of President Donald Trump] Herschel Walker speaking about Loyal. How good a football player was Herschel? Herschel Walker, now he’s ambassador to the Bahamas. I don’t know, Bahamas, Bermuda. Is he Bahamas? Whatever. It’s nice, a nice place.
Jane Coaston: Oh. That stupid. Okay. And let’s not even get into Trump fawning over Nicki Minaj’s nails. [music break] On today’s show, Arizona Republicans want to supply ICE at polling places, and not the kind that combats the state’s hot temperatures. And Meta CEO Mark Zuckerberg takes a stand in a case weighing if social media platforms deliberately addict and harm children. But let’s start with the Internal Revenue Service. It’s tax season, in case you haven’t gotten a thousand emails from TurboTax yet. And the Trump administration would like you to know, or believe, rather, that your tax refund is going to be big this year. Here’s President Trump at a cabinet meeting in December, sounding positively thrilled about it.
[clip of President Donald Trump] Next year is projected to be the largest tax refund season ever. And we’re going to be giving back refunds out of the tariffs because we’ve taken in literally trillions of dollars. And we are going to be giving uh a nice dividend to the people in addition to reducing debt.
Jane Coaston: Remember Trump’s big Republican spending law debacle disaster adventure, the bill passed last year that gave billions of dollars to federal immigration enforcement? It was also designed to give Americans big tax refunds that would, by the Trump administration’s logic, give them reason to vote for Republicans in the midterms. According to the Wall Street Journal, the total amount of money delivered in refunds this year could reach $100 billion. But don’t forget, they’ll mainly go to middle and upper middle income households. There are more than a few problems with this give-everyone money to make them vote for us plan. First and foremost, the IRS has lost tens of thousands of employees since Trump took office, the result of DOGE, policy differences, last year’s government shutdown, and layoffs. Now the agency is asking thousands of untrained employees from other departments to help with taxpayer services, as in the people tasked with answering your questions. Those job cuts and changes could at best slow down your refund. At worst, the IRS could be far less able to stop scammers. Still, let’s say you get a bigger tax refund this year. Problem is, prices on basically everything are still super high, which gives you less of a chance to hold onto that money. And will you even remember your tax refund when you head out to vote in November? For more on this, I spoke with Vanessa Williamson. She’s a senior fellow at the Brookings Institution and author of The Price of Democracy, the Revolutionary Power of Taxation in American History. Vanessa, welcome to What a Day.
Vanessa Williamson: Oh, thanks for having me. I’m glad to be here.
Jane Coaston: What did leadership and personnel turnover at the IRS look like in 2025?
Vanessa Williamson: Well, it’s like nothing I’ve ever seen before. We lost a quarter of IRS workforce and more than three quarters of senior leadership. And that’s not political positions. That’s people who were career civil servants who’ve been there for decades under both kinds of administrations. We just lost an enormous amount of professionals, an enormous amount of experience.
Jane Coaston: What does this loss of personnel mean to taxpayers who might need to talk to someone at the IRS? I know I’ve had to do that in the past. If they call the IRS, will they get someone?
Vanessa Williamson: Not as many people working those lines as there used to be. Um. They realized late this year, this was true in a number of different agencies, I think that they had fired a lot of people that they actually really needed. And they rushed to try and hire at the end of the year, but they didn’t get it done for some really important positions. They’ve only hired about 2% of the staff that they need. So they’re already predicting a lower level of service as they call it. That is to say the likelihood of your phone getting, and your phone call getting through. But I think we could see really serious delays if you call with questions to the IRS. And that’s really sad because the IRS had made major investments in recent years and it was really on an upswing.
Jane Coaston: So that low staffing means for the average taxpayer that calling to ask a question probably isn’t gonna work.
Vanessa Williamson: I mean, you can try. You know the thing about the IRS is they’re used to being understaffed. They’re used to being under-resourced. They’re used to being under scrutiny. And so they’ll work really hard. You know they’re used to trying to get it done for the taxpayers. Everyone knows it’s an important time for our millions and millions of Americans. So they’re gonna try, but they’re just, you can’t make yourself into more people if you’re the person answering the phones. And so I think, yeah, it’s likely that you’ll be seeing delays, kind of like we saw at Social Security last summer.
Jane Coaston: In previous years, the IRS has reported gaps of nearly $700 billion between what taxpayers owe and what the federal government has actually received. Is that tax gap likely to grow due to understaffing at the IRS?
Vanessa Williamson: Absolutely. So it’s important for people to know that $700 billion is what the American people are leaving on the table, right? That’s because people aren’t paying their fair share. It’s you won’t be surprised to learn mostly from people at the top underreporting their income. So yeah, it’s a huge sum and it’s very, very likely to grow because this is an area where we had been staffing up again under the Biden administration. There had been real efforts to increase enforcement at the top. Well, a lot of those folks were new. And so a lot of them were the first to go last this last year. And so enforcement’s going to be in decline, and that means that revenue is going to go down in the longer term.
Jane Coaston: What does that mean in terms of that lack of revenue? What does that do to us? Because I know that for lots of people, the IRS is an entity that exists largely to annoy you. But like, where would that money be going?
Vanessa Williamson: Right. So first of all, I should say it’s absolutely right that the IRS currently is administering like an annual quiz to the American people. It’s very irritating, right?
Jane Coaston: Yeah.
Vanessa Williamson: That you have to like fill out your paperwork. And if you have a regular job, the IRS already knows the answer to the questions, right?
Jane Coaston: There’s this joke I saw where it’s like, you know, the IRS is like, we know all the answers to this quiz, but we’re not gonna tell you what those answers are. You have to guess them. And if you’re wrong, you owe us thousands of dollars.
Vanessa Williamson: Right, so this is something that the IRS was trying to fix. They don’t love this either, right? I mean, why would they want to have to go through all the paperwork? So there was this thing that they launched in 2024 called Direct File, which was a program that was free public tax preparation. Right. You could go and do your taxes directly with the IRS and you don’t have to pay someone to do it. And then last year they were starting to roll out what’s called pre-population, which is the jargony term for when the IRS would put in the data that they already know. And of course you could fix it and correct it and they don’t know everything. You know maybe you got a second job, maybe you had a kid. You know there are things the IRS doesn’t know and you’d want to be able to fix it, but yeah, there was an effort to solve this exact problem, but unfortunately that’s one of the many things that was shut down this year. So yeah, the frustrations will continue, I’m afraid.
Jane Coaston: Last year, the IRS agreed to share data with ICE, a massive betrayal of the trust of many immigrant taxpayers, because many immigrants, including undocumented people, pay taxes. What do we know about the data that’s been shared since that agreement was made?
Vanessa Williamson: Yeah. So a lot of civil servants said that this violates the law, and they tried to stop it. And when they couldn’t stop it, they left, because it’s illegal. The IRS had been promising for 30 years that your tax information is safe, that it is safe to file if you’re undocumented. In fact, that it was part of the pathway to citizenship. And we betrayed that trust this year. The amount of damage we’ve done to public perceptions of the security of their tax data this year is an extraordinary loss. So the IRS nonetheless many people at IRS tried to slow this down and tried to make sure it was as limited as it could be. What we thought was true was that there were about 47,000 people whose tax informations had been shared with ICE. Well, just last week, a news story broke that said that there’s actually thousands more and that this was an error. And that’s what happens when you lose the class of people who were doing this work, who saw it as their life’s mission to keep your data safe. Well, we lost a lot of those people, and so now we’re in some real trouble.
Jane Coaston: Something I’ve been hearing a lot about, um because it’s coming from the Trump administration, is that tax refunds are going to be really big this year. First, will refunds as a result of Trump’s so-called one big, beautiful bill actually be noticeable for many taxpayers? And also, why will refunds be bigger in the first place?
Vanessa Williamson: So, it’s a little bit of a silk purse out of a sows ear situation. Um. When you have a larger refund, it means that the IRS was withholding more than they should have been, right? Now, that may be because they didn’t know about a change in your tax situation, but a lot of it this year is because they didn’t update things, because the bill came through late, because they made a bunch of complicated changes, because there’s very few people to do the work of implementing the tax law, and of course, we also shut down the government. So, a lot of work that could have gotten done, right? And it would have adjusted you could have adjusted your withholding in some ways. Well, it wasn’t done until late on. So maybe your refund will be larger. I want to caution people to be really careful about not expecting too much out of these refunds. And you know it is a real problem that when you know a lot of big sales are made about like, oh, your refund is going to be so huge, it really plays into the hands of scammers, right. One of the major things the IRS is doing is preventing identity theft, preventing people from getting scammed on their taxes and getting their refunds stolen. So the refunds that you were expecting are probably a little lower than you expect. Let me give you a couple of examples. You might have heard no tax on overtime. Well, it’s actually no tax not on time and a half, but on the half. It’s a little smaller. You might’ve heard no taxes on tips. Well, that’s limited. And probably if you’re a tipped worker, you don’t make enough to owe anyway. So there are a lot of ways in which these benefits look kind of good. They look sparkly and shiny. They’re probably a little smaller than you expect. And I would be very, very careful about picking a tax preparer who says they’re gonna get you some huge refund this year because I think it’s been oversold.
Jane Coaston: Have previous presidents also tried to use bigger tax refunds to their benefit? Did that strategy work? Or is this something new for the Trump administration? Because I know that like the idea of lowering your taxes is one thing, the idea of increasing your tax refund is a different thing altogether.
Vanessa Williamson: Yeah, I mean, sure, it’s talking about lower taxes that must sell because all the politicians do it all the time. What they might not realize is that Americans forget really fast. So George Bush did this big thing to give everyone you know a tax break. Um. People didn’t remember it after a year, right? Nine out of ten people had forgotten it happened. Obama did the same thing, got the same complete lack of credit for it. People didn’t t know their taxes had gone down. So yeah, I mean, there’s a lot of rhetoric about you know low taxes and politicians on both sides of the aisle, use it. But the reality is there’s very little payoff. Um. Mostly because people don’t notice. Their tax situations change from year to year. So you don’t always get the same size refund and you don’t really know whether it was policy or something about your job or maybe your withholding was wrong. So yeah, so I think the payoffs are pretty small here actually.
Jane Coaston: Who stands to benefit the most from the latest Trump tax cuts?
Vanessa Williamson: Oh, the very wealthy. This was the most regressive tax policy ever in the history of our income tax. Yeah, it was a huge, huge, huge break to those at the very top. They sprinkled some shiny objects onto these temporary tax cuts like I mentioned about, no tax on overtime or tips, but the bulk of this money went to the people at the very very top. So it’s a meaningful implications in terms of the consolidation of wealth in this country.
Jane Coaston: So you talked about avoiding scams when getting your taxes prepared. What other advice do you have to people in our audience as they do their taxes this year? As something we all kind of avoid doing and hate doing and find annoying.
Vanessa Williamson: Look, the main piece of advice is maybe not what people want to hear, it’s do your taxes early, right? Get your refund, get it done. One of the things about doing it early means that it will give scammers less time to have filed on your behalf. Um. Also that’ll give you more time, you won’t be coming in the big rush with everyone else um and so it’ll probably get your refund out the door a little faster if you’re getting it done right at the beginning. One thing I would love is for the American people to pay a little bit more attention to this huge, huge economic decision that we make, right? Every year, all the decisions we make about the tax code sounds so boring and so arcane and so unfair. But the reality is that, look, if you care about things like um you know the consolidation of wealth, if you about inequality, a huge part of that comes through our tax code. So pay attention and watch out. You know watch out for when you’re getting sold a line about some special tax break that maybe isn’t so great after all.
Jane Coaston: Vanessa, thank you so much for joining me.
Vanessa Williamson: Thank you.
Jane Coaston: That was my conversation with Vanessa Williamson, Senior Fellow at the Brookings Institution. We know the news can be taxing, and we’re grateful you’ve chosen us to prepare it for you. So if you like the show, make sure to subscribe, leave a five-star review on Spotify and Apple podcasts, watch us on YouTube, and share with your friends. More to come after some ads, and I promise no more tax jokes. [music break]
[AD BREAK]
Jane Coaston: Here’s what else we’re following today.
[sung] Headlines.
[clip of Kevin Hassett] I mean the paper is an embarrassment. It’s I think the worst paper I’ve ever seen in the history of the Federal Reserve system. The people associated with this paper should presumably be disciplined because what they’ve done is they’ve put out a conclusion which has created a lot of news that’s highly partisan based on analysis that wouldn’t be accepted in a first semester econ class.
Jane Coaston: National Economic Council Director Kevin Hassett was very mad at the New York Federal Reserve when speaking to CNBC on Wednesday. Why? Because the Newark Federal Reserve published a paper that stated that 90% of the economic burden of Trump’s tariffs have fallen on U.S. consumers and companies. Because it has. The paper, posted February 12th, isn’t new information. Other sources, including the Congressional Budget Office and Harvard Business School, have reported the same thing. American consumers are paying for Trump’s tariffs. To the tune of about $1,000 per household in 2025, according to the Nonpartisan Tax Foundation. That’s because American companies are passing on the costs they’re paying for imported goods, costs generated by the tariffs, to you. And even Hassett’s explanation of how this is all working out great for Americans has a sticking point for consumers.
[clip of Kevin Hassett] So the basic theory of President Trump’s tariffs is that there are, sure, we’re importing stuff from China, but we got producers in the US that make the same stuff, maybe at a slightly higher price. If we bring the stuff home, create the demand at home, then that will hurt China and drive up wages of the US, and American consumers will be better off.
Jane Coaston: Did you catch that? The part about prices being higher? Hmm, that would seem to go against the Trump administration’s own logic on tariffs, as spelled out in a Wall Street Journal op-ed written by President Trump. That piece argued that foreign countries would, quote, “eat the cost of tariffs and lower prices,” which is not how tariffs, which are supposed to raise the cost of imported goods, work. But apparently, basic economic facts are a problem for the Trump Administration. Time to fire some people. Meta CEO Mark Zuckerberg took the stand in a Los Angeles courtroom on Wednesday. Zuckerberg’s testimony is part of an unprecedented trial that questions whether social media platforms like Meta’s Instagram deliberately addict and harm children. Meta denies the accusations. The plaintiff, who is now 20 years old, claims her early use of social media addicted her to the technology and exacerbated depression and suicidal thoughts. While on the stand, Zuckerberg was asked about young people’s use of Instagram, his previous congressional testimonies. And internal advice he’s received about not coming off like a human robot. Seems like that advice didn’t take. Meta platforms and Google’s YouTube are the two remaining defendants in the case. TikTok and Snap Inc. settled. The Arizona Senate will vote on a plan that would require federal immigration officers at all polling places in the state. The proposal would compel each county to make an agreement with the Trump administration to provide, quote, “federal immigration law enforcement presence anywhere ballots will be submitted during the 2026 general election,” which means Arizonans could run into immigration and customs enforcement officers, not just on election day, but also at drop boxes and early voting locations. Sounds like a great way to suppress voters. The plan makes clear it is not authorizing federal immigration agents or election officials to question, detain, or arrest voters just to determine their eligibility. So how would they know you’re American? ESP? Trump gear? Looking white? The Trump administration is pushing back against a court order to restore an exhibit on people enslaved by George Washington in Philadelphia. Last month, National Park Service workers abruptly removed exhibits referencing slavery from the site on Independence Mall. This prompted the city to sue. A U.S. Senior judge granted an injunction on Monday and ordered the display to be restored while the lawsuit proceeds. In the ruling, the judge wrote, quote, “as if the Ministry of Truth in George Orwell’s 1984 now existed with its motto, Ignorance is Strength. This court is now asked to determine whether the federal government has the power it claims to disassemble and disassemble historical truths when it has some domain over historical facts. It does not.” Of course, the Trump administration has filed a notice of appeal. Between this and his bizarre shoutouts of all of his Black friends on Wednesday, Trump is doing a great job honoring Black History Month. And that’s the news. [music break]
[AD BREAK]
Jane Coaston: That’s all for today. If you like the show, make sure you subscribe, leave a review, let me investigate whether or not Reese’s Peanut Butter Cups really taste different than they used to, and tell your friends to listen. And if you’re into reading, and not just about how the grandson of the inventor of Reese’s peanut butter cups is alleging that Hershey’s is cutting corners by changing some of the ingredients, like me, What a Day is also a nightly newsletter. Check it out and subscribe at Crooked.com/subscribe. I’m Jane Coaston. And Hershey’s responded by saying it hasn’t changed how Reese’s Peanut Butter Cups are made. I believe only I can solve this problem by eating a lot of Reese’s peanut butter cups. [music break] What a Day is a production of Crooked Media. It’s recorded and mixed by Desmond Taylor. Our associate producer is Emily Fohr. Our producer is Caitlin Plummer. Our video editor is Joseph Dutra. Our video producer is Johanna Case. We had production help today from Greg Walters and Matt Berg. Our senior producer is Erica Morrison and our senior vice president of news and politics is Adriene Hill. Our theme music is by Kyle Murdock and Jordan Cantor. We had help today from the Associated Press. Our production staff is proudly unionized with the Writers Guild of America East. [music break]
