by Jeff Jacoby
The Boston Globe
In reality, the refunds sent to them by the Internal Revenue Service are nothing more than the belated repayment of interest-free loans made to the government in the form of excessive taxes withheld from their paychecks. They’re getting back money they never owed in the first place. That doesn’t represent a windfall, it represents a loss — the loss of everything they could have done with their money if they’d had access to it, and the loss of purchasing power eroded by inflation. It shouldn’t make anyone happy to overpay their taxes.
https://jeffjacoby.com/27724/happy-about-your-irs-refund-dont-be
 If, as has been said, taxation is the art of plucking the goose without making it squeal, then the Treasury Department policymakers who implemented tax withholding were virtuosi. |
LIKE MOST Americans, I got my taxes filed before this week’s Tax Day deadline. And like most Americans, I got money back from the IRS. You probably did too. After all, nearly two-thirds of tax returns result in a refund.
That’s not a good thing.
Many Americans have come to regard their tax refund as a plum to look forward to each spring, a windfall that compensates to some degree for the hassle of getting their tax returns completed and filed. In reality, the refunds sent to them by the Internal Revenue Service are nothing more than the belated repayment of interest-free loans made to the government in the form of excessive taxes withheld from their paychecks. They’re getting back money they never owed in the first place. That doesn’t represent a windfall, it represents a loss — the loss of everything they could have done with their money if they’d had access to it, and the loss of purchasing power eroded by inflation. It shouldn’t make anyone happy to overpay their taxes.
This wouldn’t be an issue if Americans were free to pay their taxes the way they pay for electricity, tuition, child care, groceries, or anything else — namely, by drawing money from their bank account and remitting the amount due to their creditors. But when it comes to paying the bill for government, that isn’t an option. The vast majority of American workers are never paid the full compensation they’re entitled to. Instead their employers are required by law to withhold some of their earnings and send it directly to the IRS.
Most of us are so used to this way of doing things that we hardly notice what a rip-off it is. But Chris Rock noticed. “You don’t even pay taxes — they take taxes,” the celebrated comedian fumed during his “Bigger & Blacker” standup routine. “You get your check, money gone. That ain’t a payment, that’s a jack.”
Tax withholding dates from 1943. As the economic historian Robert Higgs has written, it was an emergency wartime measure designed to collect the taxes needed to defeat the Axis.
On the eve of World War II, when only the highest-earning Americans were subject to the federal income tax, fewer than 4 million individual returns were filed.
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