It’s tax time again, and Withholding an Opportunity Society: Why We Need Personal Tax Savings Accounts explains that a tax refund is not a gift from the government:
In 1943, the Current Tax Payment Act (legalizing mandatory federal tax withholding) was sold amidst solid opposition, with patriotism and taxpayer convenience the main selling points. Since then, withholding has become so commonplace and sacrosanct that many people today view tax refunds as income and wouldn’t know what to do without them. People pray for large refund checks come tax time. The obvious truth is that a refund check is just a refund check — it is excess money earned but not taken home, lent interest free to the government.