This isn’t political. I’ve sworn off politics on Social Media. This is about education, which seems to be lacking with regard to how income tax works.
I’ve seen a lot of hand-wringing about tax refunds being lower than in previous years. Some people seem to think this means they’re paying more taxes. At first, I thought they were joking. Then more and more of these posts appeared, some from educated people who should know better. When the realization struck that they were serious, I nearly swallowed my chewing gum.
Stop it.
Educate yourself.
The government confiscates your money throughout the year based on what they ESTIMATE you owe in total taxation. It’s your money, and they take it to insure you can settle up at tax time. They know that if they hit you with your total tax bill on April 15th, you couldn’t pay it. You would have frittered that money away needlessly on things like food and diapers. How could you possibly come up with enough cash to pay your share of Congressional slush funds?
If you file a return and get a refund, it means they confiscated MORE THAN you owe. They are kindly returning YOUR money. If your refund is LESS THAN last year’s, it means they estimated more accurately, and came closer to targeting your final bill. Your “fair share” may be higher than last year’s; it may be lower. In either regard, it has NOTHING to do with your refund.
Example:
On 15 April, 2018, you completed a tax return and your total tax obligation was $1,000. Throughout the year, the government stole from your paychecks $100 per month in, ahem, “withholding.” In total, the IRS stole $1,200 from your paychecks. You should have gotten a refund of $200.
Let’s say, on 15 April, 2019, your obligation is $900. Throughout the year, the government stole $80 per paycheck, or $960. Your refund due to you would be $60, which is *gasp* LESS than last year!
Are you paying less tax or more tax than last year? I’ll let you work that out.
You can argue what’s fair and not fair, and whether $900 is the right amount or not, but please stop the idiocy about the size of your refund. The best balance between government confiscation and tax obligation (for most people) is a refund of ZERO, which means you get maximum effective use of your money without having to cough up extra at the end of the year.
One final note about taxation: Next time somebody blathers on about how corporations should pay a higher tax rate, research and answer these questions for yourself: Who pays corporate taxes? Where does that money come from?
Texanation 