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Tax Refunds vs. Tax Burden
It is expected that individuals will receive smaller federal tax refunds than they did last year. Does that mean people are paying more in taxes? No, but will that stop people from making that claim?
The average tax refund is down about $170 compared to last year. Let’s call the President’s tax cut what it is: a middle-class tax hike to line the pockets of already wealthy corporations and the 1%.
— Kamala Harris (@KamalaHarris) February 11, 2019
A refund is an overpayment. If you paid $5,000 through withholding and your actual tax bill is only $4,000, you will get a $1,000 refund. In other words, you gave the government a $1,000 interest-free loan and now they are paying you back. If your tax bill was $4,000 and your withholding throughout the year was $4,000, then you won’t get a refund. In both examples, you paid $4,000. The fact that you did not get a refund in the latter example doesn’t change anything.
When the new tax laws were implemented, the withholding tables were also adjusted so that people could see the benefit of lower taxes in your paychecks immediately. Are middle-class taxpayers paying more or less under the new plan? Is this, “a middle-class tax hike to line the pockets of already wealthy corporations and the 1%”? Probably not. How this works out as a whole is yet to be seen. For me, the increased child tax credit leaves me with a lower tax burden. However, if I did not have kids, I would be paying more under the new tax laws. To tell if you are doing better or worse under the new tax laws you will have to look at the amount of tax you are paying, not the size of your refund.
When I hear people talk about their taxes, they are more likely to mention their refund rather than the amount of tax paid. Since withholding happens before you ever see the money, people think in terms of net pay rather than the gross. So when they get some of those taxes back the act like they won something. The truth is, a lot of people don’t really know how much they pay in taxes. Your payroll taxes come out before you ever get the money. Your property taxes are often hidden in your mortgage payments. And if don’t know how much the government is taking from you, how likely is it you’ll ever complain about how it gets spent? Know how much you are paying. Look at your federal taxes, your social security tax, your state tax, your local taxes. Add them all up and see if that doesn’t make you just a little more of a conservative.
Published in General
You recently saw an idiot.
Yes. It’s surprising how many people are willing to display their lack of intelligence and that they shouldn’t be allowed to operate a vehicle with bumper stickers. “I’m with her”, I’m giving you plenty of room because who knows what you’re going to do with that car.