The Tax Man Giveth
Last year, when I filed my taxes I got a huge refund, so large that our summer plans suddenly opened up because we had extra money to use. I was confused by this because I don't have taxes deducted from my paycheck; an advantage to earning income overseas is that it is tax exempt, except for the payroll taxes. In fact the refund I got back actually exceeded my annual payroll deductions. I couldn't understand how this worked until I read this article in the Wall Street Journal.
I have to say, in general, I am very uncomfortable with this tax policy. First of all, because, as the WSJ rightly says, it is welfare disguised as tax policy, so well disguised, in fact, that I wasn't aware that I was a beneficiary of welfare until I read the article.
Which leads me to my second problem. I don't want welfare, and don't feel I need it. I wouldn't apply for it even if I knew it were available for it. In this system, however, I have little choice to apply for it, since I have to file my tax claims. I'm sure I will continue to take the "tax refunds" I'm eligible for, since I have my tax claims prepared for me online, and don't have much to do with the actual details.
The fact that this has become a way for welfare to sneak back into the system, in a form much harder to resist than the old welfare system. WSJ rightly faults Obama for using this formulation as a way to claim that he is giving "tax cuts" to 95% of the American people.
I do believe in progressive tax rates, but this is silly. If you want to redistribute wealth, then do it above board. Welfare, though is so unpopular that it would never pass. If that's true, then it shouldn't be snuck into the tax system.
I have to say, in general, I am very uncomfortable with this tax policy. First of all, because, as the WSJ rightly says, it is welfare disguised as tax policy, so well disguised, in fact, that I wasn't aware that I was a beneficiary of welfare until I read the article.
Which leads me to my second problem. I don't want welfare, and don't feel I need it. I wouldn't apply for it even if I knew it were available for it. In this system, however, I have little choice to apply for it, since I have to file my tax claims. I'm sure I will continue to take the "tax refunds" I'm eligible for, since I have my tax claims prepared for me online, and don't have much to do with the actual details.
The fact that this has become a way for welfare to sneak back into the system, in a form much harder to resist than the old welfare system. WSJ rightly faults Obama for using this formulation as a way to claim that he is giving "tax cuts" to 95% of the American people.
I do believe in progressive tax rates, but this is silly. If you want to redistribute wealth, then do it above board. Welfare, though is so unpopular that it would never pass. If that's true, then it shouldn't be snuck into the tax system.
posted by Jonah at 4:59 PM
2 Comments:
Even coming out of the mouth of a person who lived on welfare for years and frankly doesn't have a real problem with the social program (under reasonable administration), if you've zeroed out your tax liability, it seems to me as if you should just stay at that point -- you shouldn't then tilt over into "in the black" territory. That does seem odd.
How many tax credits do you have, anyway? Jeez.
I disagree. Low and middle income families deserve to benefit of refundable tax credits such as the earned income tax credit and child tax credits.
The Wall Street Journal has no problem with corporate welfare, but take issue with refundable tax credits. Many low and middle income working families could really use this income. Many economists consider it sounds policy (check out EPI or other progressive economic think tanks if you doubt me).
I could go into more length about this, but I'm not sure if anyone will read this comment.
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