The annual tax filing season is in full swing again and most of us are going to get a refund from the federal government. But have you ever thought about just what that money represents? Tragically, it’s nothing more than your very own personal interest-free loan to the feds. Every week the federal government takes money out of your paycheck as an incremental payment against what you agree to pay them as a portion of your annual income to cover those things with which the Constitution charges the federal government to do (i.e. maintain the military). But for most of us, after just a few months of making those little incremental payments, we’ve satisfied our annual tax obligation. Yet for the rest of the year we continue to hand over our money to the federal government for no other reason than that’s just the way it’s always been done. Then we get all excited about the “big refund” we’re going to get come April 15th. Money that is nothing more than repayment of the money we have loaned the federal goverment, but for which they don’t even pay us interest.
Folks, that’s insanity. The federal government not only spends the money we agree to pay them on our income, they run off and spend all the money we loan to them, too. And they do this with every penny we will owe and will loan them years and years into the future. Right now they are spending money based on pure speculation of how much we’ll be obligated to pay them and how much we’ll be loaning them in the future. But as people continue to lose their jobs, the federal government collects fewer and fewer income taxes yet is still obligated to pay back those unemployed workers part of their money through unemployment benefits, just like they are obligated to return our loaned money to us. And that’s just one small, very simplistic example.
Let’s put it in real world terms. What would happen if someone gave you more money than they owed you and you spent it all? Your income doesn’t leave you with any extra money so when they come asking for it you’d have to borrow from Paul, wouldn’t you? If you didn’t cut back somewhere and save, but instead continued to spend money like you had all the original money given to you, when your loan from Paul comes due, eventually you’d end up robbing Peter to pay him. That kind of personal fiscal irresponsibility made headlines last year and created the slogan, “Your mortgage is not my problem”, yet that’s exactly how the federal goverment, Congress-driven, handles our country’s finances.
One more time: that’s insanity.
His Transparency and the Demons in Congress are now all a-buzz with what they are calling a “jobs bill”, which in truth is nothing more than a second stimulus package; no matter that the first stimulus was, for all intents and purposes, a failure and that much of it is simply being held back until later this year in order to try to force some of their “oops!”-derived numbers to go up right before the mid-term elections, hoping better numbers will help their cronies stay in office. Frankly, that kind of game at the expense of every hard-working American ought to be reason enough to vote the incumbents out of office, but I digress.
This second stimulus-aka-“jobs bill” contains no real help for ordinary Americans. It rides on various and sundry tax credits, but we all know (or we should all know by now) that tax credits are not the same as tax cuts; credits are just another form of that interest-free money loan by working Americans to the federal government. So instead of waiting for the mercy of Congress and the feds to let you keep that which you have honestly earned, it’s time for every Patriot to do their part and begin to starve the beast into proper submission.
This is by no means a new idea and we’re not the first to propose it but it’s very, very simple. If you normally get a federal tax refund, just adjust your W-4 to increase the number of dependents used to calculate the amount of money taken out of your paycheck to cover your federal tax obligation. Every increase in the number of federal dependents claimed on your W-4 (not the same as what you are allowed to put on your annual federal filing) will keep a few more of your own dollars in your pocket.* If every working American sent just a minimum amount less to the federal government by, say, increasing their number of W-4 dependents by a count of one, from my guesstimate calculations using the current number of employed Americans and the average annual income in the private sector, it would add up to a few billion dollars. A drop in the bucket compared to what they spend every day, sure, but it would give our government another clear sign we are tired of them spending what they don’t have and we will no longer loan them our hard-earned monies to use as some phantom hedge to promise more and more ridiculous entitlement programs. We’ll keep more of our money in our own pockets to help us pay our own obligations, which as every study of tax cuts shows, does the most to stimulate the economy.
* Reducing the amount taken out of your paycheck for federal taxes correspondingly decreases your federal tax refund the following year so don’t go crazy here because you will be penalized at tax time if at least a minimum amount isn’t automatically sent to the feds; consult a tax advisor if you have questions.