Tax refunds aren't as hefty as expected

[underpants]

Thu Apr 15, 6:59 AM ET
http://story.news.yahoo.com/news?tmpl=story&ncid=&e=5&u=/usatoday/20040415/bs_usatoday/taxrefundsarentasheftyasexpected

As tax season draws to a close, many taxpayers are discovering that predictions of a refund windfall were overblown.

Through April 9, the average refund was up $102 to $2,090, an increase of about 5% from refunds during the same period last year, the IRS says. Economists and tax analysts had earlier predicted the Bush administration's $350 billion tax-cut package would boost refunds by more than 25%. The administration estimated the average refund would increase $300.

Economists are puzzled by the smaller-than-expected refunds. "It's a bit of a mystery," says Goldman Sachs senior economist Jan Hatzius.
_________
Conversely, the Bush administration says an increase in some taxpayers' incomes could have reduced refunds. "That would be great news for the economy, and it would mean benefits from tax cuts were even larger than expected," says Treasury spokeswoman Tara Bradshaw.

[BayCityProgressive]

1. I am not completely

opposed to tax cuts, I think they do a lot of good. Tax cuts for middle and lower class, small business, and responsible corporations and investors is fine by me. I highly doubt however, that the Bush tax cuts were a source of any good.

[BostonTeaParty04]

9. You sound like you aren't sure....

'maybe' the tax cuts were not a source of any good.

Average increase in tax refund: $102

My property taxes went up $400
My local taxes (to pay for school funding shortfalls): another $250
Fees for state services/recreation: all increased

[skippysmom]

25. same here

For most of us, our tax cuts were offset by increases elsewhere -- so they effectively weren't much of a tax cut.

My refund of $200 total (fed and Mass) was more than offset by a $500 increase in property taxes, a 25% hike in the health insurance premiums as a state employee, and an increase in every fee imaginable. (Thanks Mitt.)

I don't mind cutting taxes for the middle class and the poor -- but the net seems to be a stablization in tax cuts for these classes or even a tax increase.

Meanwhile, the millionaires get off paying as little as possible.

[koopie57]

32. I called my

republican representatives and told them that I can't afford any more tax cuts. They're killing me.

[freetobegay]

2. Mine was "wimpy wimpy wimpy"

eom

[billybob537]

3. They were great for millionaires

For the rest of us we'll be paying for them for 20 yrs.There ain't no free lunch people.:puke:

[greatauntoftriplets]

4. The damned surprised economists must be repukes.

I am no economist, and I am NOT surprised.

My "windfall" totalled $35.

[maddezmom]

5. perhaps because folks are working McJobs

and not making the same wage they did the year before.

[underpants]

17. Listed in the article (sort of)

• The economy. Many taxpayers were unemployed or worked fewer hours last year, resulting in lower incomes and smaller refunds, says Mark Ernst, chief executive officer of H&R Block, the USA's largest tax preparer. Refunds for Block customers are averaging about 5% higher this year than last.

[papau]

6. an increase in some taxpayers' incomes ?

they have the exact numbers - why pretend it might have happen - if it had they would be saying so.

[BostonTeaParty04]

7. It's like these middle classers thought: tax cuts = I will make MILLIONS

Like they all got onto a corporate board or something. We will all be rich, rich, rich, I tell you!!

People are so tuned into the republican lie/mantra: taxes are evil. But, boy, they sure like to drive their shiny cars on all these nice streets; and take rover out to the national park for some hiking; and feel safe drinking water from the tap; and that whole LIST of everything we do everyday where TAX MONEY is used to provide the benefit.

I want to see an article showing how much tax money was NOT collected on investment income. Billions? A trillion????

[SeattleDem]

29. don't blame them, they were told an average of $1500 was coming

remember, Bush used misleading information to sell these tax cuts. He told us the "average" refund would be $1500.

Well, the average probably still was. He got what, $20,000, and Cheney got something similar. Add those into the mix, and of course the "average" is high!!

Remember, if Bill Gates comes to my house, the "average" income in my household increases by billions!!

[kichigai usagi]

8. Lucky me..

I have to pay even more this year. Even my unemployment is taxed to the hilt, why do we pay taxes on unemployment benifits anyway?

It's not like i can find any work yet i pay taxes on money that is not even enough to survive on as it is.

But then i'm single with no children so none of the incrediable taxcuts were for me anyway..the single people always get screwed.

[Mountainman]

10. You only get a refund if you over paid your taxes.

If you don't get a refund and you don't owe anymore than you paid in you are doing the best thing you can. The withholding schedules were changed along with the change in the tax laws therefore I don't see why people think they would get a bigger refund just because the rates were changed some what. This just goes to show how gullible Americans are and how ignorant they are about income tax law.

[SeattleDem]

30. good point - what they need to do

is determine what percent AGI they paid this year versus last year, forget the amount of the refund.

[Aristus]

11. I HAD TO PAY THIS YEAR!!!!!!!

First time in over ten years!!! :mad::grr:

Thanks for nothing, Prezdint Fuckhead!!!

[BayCityProgressive]

13. The whole tax system is rigged against Americans...

In my earlier post I said I doubted the Bush tax cut helped anyone. I said this because I personally was not helped, I was actually hurt...all of these tax cuts have cut financial aid for college which I need and I didn't get any bigger of a refund than last year. However, I cannot speak for everyone else as I don't know their tax status. Kerry's plan to go back to the Clinton tax policy is a start..BUT the whole tax system needs to be reformed and I highly doubt the Democrats or Republicans have a will to do it.

[underpants]

18. We are paying $1,600 today

Se we don't own a house of have children. I guess we are getting a house this year.

[cosmicdot]

27. one McHouse to go ... would you like Freedom Fries with that?

[wryter2000]

22. I had to pay a bunch

Figure this...two people with gross income about $50K. One over 65 (so about 14K was in social security). We paid 22K on interest on our mortgage, and our income tax was still over 3K. Income tax alone! I had to write a check for $1,800. Tell me we got a middle class tax cut. Right. :grr:

[daa]

12. No mystery

The withholding amount was lowered so you received your refund every pay check. Similar thing happened under Carter. He reduced withholidng amounts to juice the economy but never cut taxes. When people filed they were stunned to find they owed it all back.

[SoCalDem]

14. Three easy reasons..

1. Lots of people were unemployed for part(or all) of the year..earned less

2. Withholding tables were adjusted downward..(less withheld to start with...)

3. The "Payday Loan" that lots of folks got last summer.


There is no "free lunch"..

[RebelOne]

15. What tax refund?? I still had to pay.

Last year I paid $90, this year, I paid $80. Big tax break saved me a whole $10.

[Jeff in Cincinnati]

16. One reason...

Tax refunds are lower than expected because the primary basis for the refund (for middle and working-class families) was the increase in the Child Tax Credit, which was doled out as a "rebate" last August. Other than the child tax credit, there was virtually nothing in the Bush Tax Cut for working familes (or single folks or people with no children).

It's a bit of a mystery? I'm glad that Jan Hatzius isn't handling my investments! What a friggin' dolt!!

[freethought]

19. Surprise, surprise!

Or rather, no surprise, no surprise. I'm not surprises by this article one bit! The whole tax system has rigged to penalize those who work for a living. What did people expect?

[damnraddem]

20. Hmm, bigger refunds are good for the economy, whereas ...

smaller refunds are good for the economy. Well, it's logic of a sort: hermetically-sealed tautology.

Sorry, America, if you thought Dubya's economic policies had anything to do with reality, or the economy.

[Mithras61]

21. Re: Tax Refund

Let's see. our income this year went up 90%, and my taxes went up 250% (Hey, I got a decent contract job).

Gee, THAT'S quite a refund/tax cut! I guess it seems fair! (NOT!).

Actually, it isn't too bad, since the increase in pay is mostly saved against the future's unemployment (I can't plan on having a job tomorrow, much less next month because I'm under short-term contract which could vanish at any time), but I guess I'll have to start looking for some sort of tax shelter. DAMN, I HATE THOSE WORDS. I shouldn't have to try and protect my income because some slacker multi-millionaire doesn't want to pay their fair share!

I think we should push for a flat tax. Everyone pays 10% of their total income over the poverty line (about $18K isn't it?). No shelters, no protections, no exemptions, no deductions, no special treatment for corporations. That'd make tax forms much simpler and the IRS' job easier for the millions of honest people out here. Of course, we'd have to have a clear, simple definition of income, or someone would find a hole in it.

[underpants]

23. $18 for a family of FOUR yes

http://aspe.hhs.gov/poverty/03poverty.htm

One big problem with a flat tax (amongst others) is that giving to charities will be greatly reduced. I did 100+ tax returns at a middle sized firm 5 years ago and the number of checks written on 12/31/__ was staggering. Unless you allow to still deduct those contributions you will see great reductions in moneys going to charities. I don't mena this to say that RICH people only give to charity for this reason but it clearly is part of it.

Also the tax codes (as screwy and pork ready as they are) also allow for a lot of tooling and incentives. The Life Long Learning and Hope Credit to get people to go back to school (earn more) and keep college and universities going are just two recent examples.

Those are just two.

[Mithras61]

26. You make some good points, but...

when you start allowing exemptions or deductions, you then have to start defining things like "charitable organization" (would that be like the Anti-Clinton Library, for example... It is a tax-free organization after all). I understand what you mean about likelihood of reducing charitable contributions, and can feel sympathy for the organizations. I give regularly, without regard to if it is deductable or not, based on if I feel the organizatino is a good and worthy cause. I wish more folks did/could.

As for tooling and incentives, I don't know if I understand what you mean by incentives, but tooling (as in revamping a factory line) could be allowed for in the definition of income (as in "profits - some forms of business expenditures such as retooling a line or retraining employees"). I know it isn't a panacea, but it has benefits in the simplicity areas that could more than compensate for the losses. The big thing is that the tax code is far too complex (I have to spend about 4 x 8 hour days filing out my forms, and I do it electronically), and allows for far too many "pork exemptions" and a flat tax would help that dramatically.

And yes, I did mean for a family of four (I have such a one, so tend to notice facts for IT, not for larger/smaller ones). My bad.


Of course, there are some other things we could do, like take back the shelters that allow corporations to transfer profits to over-seas divisions and exclude them as taxable income, etc., but the big thing is that as people get wealtier, they ease of finding shelters to protect their income and their ability to take advantage of those shelters increases dramatically. Add to that the give-aways (like being able to claim stock-value losses) and it gets even worse. The fact is that someone making $30K can afford $3K in taxes (no, it isn't CONVENIENT, but it can be done), while someone making $100K can easily tolerate $10K with no significant damage to their lifestyle, and so on, but that isn't what happens.

[underpants]

28. By tooling I mean encouraging certain actions

another example is a tax CREDIT for some of the purchase price of a hybrid car.

Getting people to do something through the tax mechanism. It should be helpful but quite often the tools that are included do more harm than good-given which side you are on politically.

I don't really mean "social engineering" but that phrase is the one they have worked into the modern lexicon of course ignoring the engineering they do as well.

[Mithras61]

31. Okay, I can see your point

but you can do the same thing with luxury taxes that discourage purchase of low-mileage vehicles by adding to the taxes that are paid with the purchase price. For example, if the vehicle gets below some standard (such as CAFE, 'tho it's rediculously low), you pay $X for each mile per gallon under that standard, or even quit giving the petro-giants their government subsidy and charge what it really costs to produce and distribute the gasoline (I think it's up near $4/gallon, but I'm not sure). After all, most of the rest of the "civilized world" (e.g. - Europe & Japan) pays a much higher price per gallon than we do, adn it isn't all due to taxes (but that may not be a bad starting point).

[trekbiker]

24. it's a big CON..

Warren Buffet got a 300 million tax break due to the reduction in dividend tax rate. If you dont make more than $200,000/yr or have SERIOUS stock investments you arent getting shit. In fact, with state and local, property, sales, etc taxes rising 99% of average Joe American is paying MORE. I'm laughing/crying my way to the bank thanks to my stock investments while arguing with my stupid dittohead friends that this is all one big CON.. the irony is that I'm actually getting a real tax break and they arent

whole goddam world has turned upside down..

[Zomby Woof]

33. I LOVE explaining why to my clients

Or maybe not.

They seem to know, through a few comments here and there, that Bush favors the rich, and they got no crumbs from the "tax cut". They know the score.

MFJ couples usually did better though, if they normally claim the standard deduction anyway. It's the single taxpayers with no dependents who get screwed.

With repeat clients, we can compare this year's return to last year's, and due to changing jobs, losing jobs, or other turmoil, it is difficult to nail down just one cause. But Bush's policies are a good start.

[0rganism]

34. Oooh! Oooh! I have a theory, call on me Mr. Hatzius!

All those people who lost their manufacturing jobs midyear and replaced it with a McJob didn't earn as much over the year as they thought they would with the first job, but didn't make less enough to merit a larger refund. Well? How about it, am I hired Mr. Hatzius?

Breaking Away Dad: "Refund? REFUND??!?!? REFUND!"

[Lucille]

35. USA Today must have nothing but contempt for their readers

Is our children learning? USA Today and Bushco seem pretty confident that they is not.

How's bout a little fourth grade arithmetic. This is a two-parter, children, so wear your thinking caps.

My neighbor has a million dollar refund and I have a dollar refund

1. What is the average of our refunds? Wow! That is a lot of money. Now for part two:

2. How much does Uncle Sam deposit into my account?

Ya have to admit, nothing tops the sheer chutzpah of "Treasury spokeswoman" Tara Bradshaw's response--people expecting bigger refunds forgot how wealthy they are.

They are so confident in our stupidity and ignorance. The worst part is, they may be right.