Posted by
Libertybob on Wednesday, February 28, 2007 8:22:59 PM
I just finished my taxes. I am getting a refund this year, but the Government still owes me $668 that I'll never see (that's on top of the millions they are cheating me out of social security, but I am going to cover that in another post...) Basically, what that means is that the government was taking my money, using for an entire year and giving it back to me interest free. Unless you end up owing taxes, you probably have given Uncle Sam such a generous loan as well.
The way our tax code is set up is actually to provide you with a refund. This helps keep people from knowing how much they are actually paying. If people had to pay a lump sum every year instead of a little bit every payday, there is no way the tax burden could have grown so large. Its the same thing all the 401(k) and IRA people like to talk about, only more sinister. Automatic withdrawal keeps it out of mind... if its never in your hands, you can't miss it.
So how much would you have gotten if you could have charged the Government the interest on the money it borrowed from you? Go to
THIS website and figure it out. Put in the amount you have taken in taxes every month for a 1 year period. Put the interest rate in as what you could have earned if you had invested that in your own savings (I used 16.48%, the return my mutual fund savings had this year...) Then subtract that amount from the taxes you actually paid, and the amount left over is what you should have earned in interest.
Just another reason to implement a flat tax...