Friday, February 15, 2019

While People Paid Less Tax This Year, They're Upset They're Not Getting Larger Refunds

In other words, less of their money was withheld form their paychecks this year so they actually had MORE money during the year to spend and are now getting less of a refund than expected.

Of course this is because a lot of people can't do math and also somehow think a tax refund come tax time is money they're getting from the government. It's not, it's their own money coming back to them after giving the government an interest free loan for the year.

The Detroit Free Press: Frustration grows as Trump tax cut affects refunds

The IRS should have kept the same withholding tables and people would be happy that they gave more of their money during the year and got back more come tax time. Doesn't make any actual sense, but people aren't always rational actors.

Only about 6 percent of tax filers are actually expected to pay more under the new tax rules, according to the the nonpartisan Tax Policy Center in Washington, D.C. The average tax increase would be $2,760.
Another 29 percent are expected to see no change in their taxes. But that doesn't mean they're going to see the same sized refund, either.
"There is a difference between having a tax cut and getting a bigger refund this year," said Frank J. Sammartino, senior fellow at the Tax Policy Center.
"Most taxpayers received a tax cut," he said.
"But because the IRS changed withholding tables to withhold less tax during the year, many will see a smaller refund than in past years."

In short, yes you are getting a smaller refund, but you are paying less in taxes as you had less taken out during the year.

This again goes to my personal plan to eliminate tax withholding and make everyone write a check on April 15 for the full amount of their taxes owed so they absolutely know how much in taxes they are paying. Oh, and have national elections on April 16.


Chuck Pergiel said...

One too many words ARE in the title.

Aaron said...

You ARE correct, fixed.

B said...

I've always said that if people had to write a check , even monthly or weekly, for the taxes that are withheld there'd be a revolution.

If I ran things, you'd get your gross pay and then have to pay a separate check or payment for each deduction.

And we'd have a new government very quickly.