Another reason for just underpaying your taxes is the increasing amount of tax fraud from people who will file a return as if they are you and claim your refund. What they never do is file for you and pay the small amount due. – C. C. S.
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It’s never, ever good to respond in a fit of anger. So, now that I’m calm, let me quote your letter writer in part: “If one must have a (pretend) “windfall” in April because of one’s lack of discipline or psychological needs…” Hey fella, the tax refund my wife and I get every year comes from our two children, farm expenses, and an earned Income tax credit, plus the standard deduction. My twice-monthly paycheck is fixed at just the right amount so that very little is going into Uncle Sam’s bank account, because it’s needed in our bank account. We can debate the merits of our tax structure and deductions if you’d like, but your assumptions quoted over describe well the adage of the first part of that word. Lack of discipline? Psychological needs? How arrogant and all-knowing of you to assume that, when so many Americans are struggling under the Obama regime. – Wile E. Coyote
HJL Responds: You’re right. We could debate the merits of the tax system for quite some time, but I think “terminology” is the problem here.
“Tax refund” implies that you paid into the system and you are getting back what you paid in. This is what the writer is talking about. Why “loan” it to the government in the first place as they don’t even pay interest on it?
“Tax credit” implies that someone else paid into the system and you are getting something that really belongs to them.
There isn’t such a thing as a free lunch. I will not condone or condemn anyone for participating in the system, but it is broken. The point being made has nothing to do with whether anyone “deserves” the money received from the government or not and everything to do with the concept that the system is so broken that it is about to implode on itself. If you depend upon the money forcefully taken from others (or simply created out of thin air through the complex “deficit spending”), then what will you do when the system does implode and the money stops?
Just so we are on the same page, understand that government does not create wealth; it can only consume. The “child tax credit” does not mean that your children are actually earning money. It’s just a fancy way of stating that the government has forcefully taken that money from someone else and given it to you (or whoever is the recipient).
Our goal is not to insult the readership but to get them to understand that their survival depends on personal responsibility and to impart the knowledge and wisdom that they need to help themselves. The fact is simply that the vast majority of people look at their tax refund as a “windfall” and then proceed to budget their finances based upon that “windfall”.