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Tax Refunds Are Interest-Free Loans To Uncle Sam

Tax Refunds Are Interest-Free Loans To Uncle Sam

It was so exciting. 

As soon as I filled out my 1040 - or whatever the simple tax form was called in the late 1970s - I phoned my dad to tell him the happy news.

After her first year of full-time employment his brilliant daughter was getting a tax REFUND! A fat one. A couple hundred dollars, if memory serves.

I was not only a college grad with a big-city job, but I had a chubby check coming my way from the government. 

I’d made it! I was a success!

I expected my father - our family’s financial whiz - to be proud of me.

Boy, was I wrong.

“A refund?” Dad repeated in disbelief. “You’re getting a refund? And you’re bragging about that? You realize you gave the government an interest-free loan all year, don’t you?”

I was uncharacteristically speechless. 

“You overpaid your damn taxes,” he said, adding, with his usual lack of concern for my self-esteem, “You’re an idiot.”

Then the questions started.

“How many dependents are you taking?” he asked.

“Zero, “ I replied. 

That’s what someone at The Washington Post had told me to do when I filled out my new-hire forms, I explained.

“Zero?” Dad barked. “Take at least two. Shoot, take five. Whatever you do, you don’t want to get a refund and you don’t want to owe Uncle Sam anything.”

”How soon can you change your paperwork?” he demanded. 


”Not sure,” I mumbled. 

”Do it yesterday,” he ordered. 

I hung up, deflated. 

Still, I have to admit that when that first IRS check arrived, I experienced Refund Rapture. That magical feeling that comes from getting something for nothing. Like winning the lottery. Or getting a gift from a munificent uncle. Uncle Sam.

But that euphoria was tainted by the knowledge that I was simply getting what was mine already. After that year, I learned  to play a numbers game, always trying to pay what I owed. Not a dime more.

And at the same time I found myself growing impatient with taxpayers building their family budgets around their yearly overpayments to the government.  I began to think of them as refund addicts.

Lliving proof we need to teach basic economics in high school. 

Why am I telling you this? Because as we sharpen our pencils and prepare our taxes this month, a number of taxpayers are going to find that their refunds have shrunk. At least that was the experience of many early filers.

Naturally knuckleheads in the tax-the-bejesus-out-of-the-rich crowd cheered. They said this meant the Trump tax cuts didn’t work.

In fact, the opposite is true. Many workers saw an increase in their take-home pay last year, meaning their tax burden went DOWN. Fewer dollars seized by the government means smaller refunds.

But try telling that to the economic illiterates in Washington.

Like Kamala Harris. Who wants to be president. Back on Feb. 11, the giddy senator from California Tweeted this:


My dad would call her an idiot. 

Politifact, the online non-profit, non-partisan fact-checking service, analyzed her statement and called it “mostly false.”

Still, it was retweeted more than 15,000 times and garnered 56,294 likes.

It’s entirely possible to get back a smaller refund even as you’re paying less in total taxes for the year, as a big majority of taxpayers are in 2018,” Politifact explained.

Nevertheless, expect to hear this tax-cuts-don’t-work gibberish a lot this spring as lefties engage in class warfare, trying to convince gullible voters that smaller refunds mean only the wealthy benefit from the tax breaks.

Even liberal Time Magazine sees the fallacy in this.

In a piece headlined, “Many Americans Are Shocked By Their Tax Returns in 2019. Here’s What You Should Know,” they tried to explain tax theory to refund junkies.

It helps to understand that it’s not actually a bonus from the IRS,” says one financial expert. “It’s a return of your money because you were overpaying your taxes. You need a level of consciousness around it.”

Somewhere, my dad is smiling.

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