Sometimes I wonder about the people who the run government. I wonder if they are liars, insane, or just plain stupid. Case in point:
As the Senate and House hash out the details of the Bush tax cuts and the extension of unemployment benefits the Treasury Inspector General for Tax Administration (TIGTA) J. Russell George released a statement today stating that 13.4 million may owe unexpected taxes. According to an audit report first filed in November 2009, here: TIGTA Audit President Obama’s “Making Work Pay” tax credit was supposed to allow individuals and couples greater take home pay by reducing the amount of taxes withheld from their pay checks. There was a $400.00 cap for individuals and an $800.00 cap for married couples which filed jointly. The audit completed by the TIGTA states that 13.4 million people failed to have enough taxes taken out of their paychecks, making them vulnerable to owing more in taxes. The “Making Work Pay” tax credit expires on January 1, 2011.
J. Russell George released a statement through the TIGTA site. He said, “The Making Work Pay Credit is a key tax credit designed to increase spending and stimulate the economy, however, many taxpayers who are accustomed to receiving refunds when they file their tax returns may have owed taxes and incurred penalties in 2009 and may yet again in 2010 because they were advanced more of the credit than they were entitled to claim.”
Some of the Making Work Pay tax credit withholding errors include examples such as individuals who filed as single taxpayers and held multiple jobs, or couples who file under “Married Filing Jointly” who also held multiple jobs each. Other issues involved those on a pension and recipients of Social Security.
So let me get this straight: a bunch of people had their withholding adjusted starting in 2009 (I did notice this) and the State tells us that it’s a “tax credit”. Except for the fact that some people will end up owing money come tax time in 2011 because they didn’t have the taxman withhold enough.
I’m not an accountant or a tax attorney, but calling this feature a “tax credit” seems to be a bit of a lie. When you file your tax returns, a tax credit is usually a reduction in the overall amount of tax you pay by a set amount. There is no paying them back any amount, despite it being called a tax credit. Technically, it probably should be called a tax debit. This is really an adjustment in the withholding amounts, not a tax credit.
In any event, it’s probably better for you to end up owing the State money come tax day rather than having them give you a rebate. What that means is that the government took more money than they should have and ended up spending it and now they’ll borrow money to pay you back what it owed to you. At least they pay you back. I’d rather keep more money and end up just paying them off when I end up owing money. It also prevents a lot of tax audit flags from firing as well.
Ultimately, this is just one more example of the Statists distorting reality in order to get their way with us. And just as there are women who enjoy being raped, there are no shortage of idiots out there who enjoy being screwed by the taxman and subsequently lied to about it.
The bottom line here is that the State is full of people who are either liars, idiots, or just plain crazy. And sadly, that isn’t an exclusive OR condition.