Question

Regret or Happiness for your Tax Refund

When it comes to be tax time, people love to start throwing around phrases that enrage me and make me wish to become a cartoon hero that points at someone and ejects a roll of duct tape towards their mouths to silence them. In my dreams, I would be a cross between Spiderman and a librarian. Anyway, how often have you heard this phrase? “If you get a tax refund, it means you’ve given the government too much money.”

This oft-repeated phrase assumes rationality: ‘If you get a refund, it means you sent extra money to the government, free of interest! Why would you let them make interest off your hard-earned money? You should only send the minimum amount!’ Then these people are usually out of breath because of their own self-proclaimed brilliance.

Answer 1

It is a matter of happiness that people get tax refund and they have accumulated this amount to spend or invest upon certain avenues. As far as initial deductions for tax are concerned, Then, it is set as an optimum level that is neither minimum nor maximum. There are many people, firms, entities who have to pay more taxes after the filing and they do not pay taxes with extra interest rates. So, it is the standard convention to receive tax by the government or repay tax refunds to the people without charging extra interest or without paying extra interest at the time of income tax return filing. So, whatever is so called gains by the government is offset by the tax dues to the part of different entities.

Hence, It is the matter of joy that tax refunds are received as an extra savings that could not take place if they were not paying as advance tax to the government.

Further, there are many countries such as India, where income tax department pays saving account interest rates to the refunds, though they do not charge extra interest if some tax dues are at the part of individuals or other entities.