So, as advertised, I am working a half day today. I am leaving Lexington at noon with Lund (one of the co-ops here) to head back to Rochester. He is hitching a ride with me to pick up a car in Rochester so he isn’t beholden to anyone here anymore. It looks like the weather will be real nice for the drive, and the iPod is all loaded up and ready for the trip.
I paid off my first major debt yesterday, my federal and state income taxes. I didn’t have any money withheld from my unemployment last year so I owed $1200 between the two. It sucks that I am out that money, but taxes are simply part of life, and I’m cool with that…. Of course, being cool with that doesn’t mean I enjoy giving them my money.. :) I have had the checks written for weeks but waited until the 15th to send it.. As far as I’m concerned, if they aren’t going to give me interest on my refund when I overpay I am not going to allow them to collect interest on my money by giving it to them any earlier than I have to.
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As far as I’m concerned, if they aren’t going to give me interest on my refund when I overpay I am not going to allow them to collect interest on my money by giving it to them any earlier than I have to.
;) Damn straight!! It’s one of the few ways we (taxpayers) can stick it to the man. I laugh when people boast about how big their tax returns are… so allowing someone to borrow your money free w/o paying interest is cool.
I never looked at it this way. That puts taxes in a whole new light…
I’ve always looked at taxes (specifically payroll witholding) that way.
I suspect most people don’t though, which is why everyone acts like their refund is some present from on high or something. I’d always rather owe taxes than get a refund. I’d rather they got rid of withholding altogether and made you write a check out on April 15th.. After all, if it disapears before you even see your paycheck, most people don’t miss it that much. If you forced everyone to plan ahead and write a 5 figure check out once a year, you’d see some serious pressure for spending and tax reforms as people realize just how much 20-30% of their income is.
The only argument I can give against that is that it might be impractical to require people to write such a large check. I imagine most people would not be able to properly plan for such an expense. Even if you tell them plenty of times with ample amounts of advance notice, there would probably be a large percentage of people who would not have the money.
All in all, I agree that it would cause a significant amount of tax reform and spending justifications.
Both you and Nuzz raised excellent points that I have never considered.
One of the “benefits” to the fact that you’d expect people not to be able to budget properly is that it would push up non-compliance rates to ridculous levels. At that point, the IRS can’t prosecute everyone, so the solution is to cut spending and drop tax rates to make compliance less than the cost of evasion. It basically makes tax protests alot easier, which I consider a good thing to a certain point. After all, as it is now, the IRS has your money, they take it before you even see it, which starts you in a losing position. It’s much easier to negotiate from the weaker position when you still have something the other side wants. None of my other creditors get to take my money before I give it to them, they expect me to budget ahead for them and pay them on the proper schedule.
Second, I suspect a large percentage of the people who wouldn’t have the discipline to set their taxes aside are the poorer 50% of the country that don’t pay income taxes now anyway since after deductions and credits they’re under the minimum incomes, and under the current system they pay withholding just to get it all back come April 15th. Simply getting rid of the overhead of handling that money over the year in Washington would save millions.