Lower Tax Bills Also Yield Lower Refunds
Leftmedia exploits the fact that too many people use withholding like a savings account.
“Lower refunds don’t mean Americans paid more taxes — quite the opposite,” says CBS News. “Most workers paid less in taxes last year and saw higher take-home pay week in and week out. But for many Americans, a slightly higher paycheck doesn’t quite have the same visibility as a single $3,000 check in March or April.”
That “visibility” — the satisfying payoff of receiving a big check — is exactly why CBS headlined its story “Tax refunds so far this year are down by $6 billion from 2018.”
CBS did accurately report the numbers, but if all you read is the headline, or if you didn’t make it past the first three paragraphs, you were grossly misled.
With the tax-filing deadline just days away, Americans will start to see many more stories like this. It’s been a theme since the IRS began accepting returns this year, as the Leftmedia spins bigger paychecks as a bad thing.
Far too many Americans treat their tax refunds as a forced savings account for big purchases. CBS notes that “while the average refund, at $2,873, is only $20 less than it was last year, about 1.6 million fewer people are getting refunds.” That means a dip in retail sales for items like appliances or furniture.
Of course, just sticking your money in a low-yield savings account at the bank will earn a far better return than an interest-free loan to the federal government. Yet that’s the insidious nature of withholding from paychecks — people tend to overlook it. When the government has first dibs on your hard-earned money, it changes your behavior. And getting the withholding to match your actual tax obligation is really tough, so why bother? Just wait for the refund.
As our own Louis DeBroux concluded in February, “While the GOP/Trump tax cuts (which not a single Democrat voted for) have been a massive jumpstart to the economy, neither Trump nor Republicans can depend on a hostile press to really admit the truth. They’ll have to take this good news directly to the American people.”