Did You Get an Income Tax Refund, Sucker?

If you expect a tax refund this year, that means you gave an interest-free loan to the U.S. government last year. Unless you intend to be so generous, you should ask your employer to reduce the amount withheld from your paycheck by filing a new W-4 Form with additional allowances.

USA Today reports on Americans paying too much too early, and what it costs us:

Americans are enjoying their biggest tax refunds ever — and it’s costing them billions of dollars.

Taxpayers overpaid their federal income taxes by a record 29% in both 2003 and 2004, according to a USA Today analysis of Internal Revenue Service data.

That has pushed refunds above $200 billion a year. Final figures aren’t in for the 2005 tax year, but the average refund so far is $2,423, up 4% from last year.…

The extra withholding gives the government an interest-free loan worth more than $10 billion a year, equal to about $100 per tax return.

“The deficit is a little smaller because of this voluntary tax,” says Leonard Burman, co-director of the Tax Policy Center in Washington.

You don’t need to help them take your money. As the Wall Street Journal enthuses, federal tax revenue is coming in hand-over-fist so far this year:

In the first five months of Fiscal 2006, through February, overall revenue continued to surge, growing at an overall rate of 10.3%, or an $81 billion increase from the year ago period, to $871 billion. That builds on the astonishing 15%, or $274 billion, revenue increase for all of 2005, which various fiscal wisemen assured us would fall off dramatically. Apparently not.

This year’s double-digit increase is roughly triple the rate of inflation, reflecting strong gains in business profits and individual wages and bonuses — both signs of a vibrant underlying economy. Corporate income taxes are up 30% so far this year, while individual income tax payments have climbed by 10.3% through February.…

If you’re wondering why the alleged fiscal conservatives at the Journal are crowing about the magnificent swelling of the government coffers, well, it makes for another good occasion to call for cuts in capital gains taxes, doesn’t it?

The IRS is looking for ordinary taxpayers like you and me to join their Taxpayer Advisory Panel.

The mission of the Panel is to listen to taxpayers, identify taxpayers’ issues, and make recommendations for improving IRS service and customer satisfaction. TAP provides citizen input by identifying problems and making recommendations for improvement of IRS systems and procedures; elevating the identified problems to the appropriate IRS official; and referring individual taxpayers to the appropriate IRS office for assistance in resolving their problems. The Panel’s subcommittees will consist of 10–18 volunteer members who serve at the pleasure of the Secretary of Treasury and will function solely as advisory bodies.

I know a few folks who might be eager to give the IRS some constructive criticism. Any takers?

A few weeks ago I pointed out the “Boycott Bush” campaign — which encourages people to boycott the products of U.S. companies that give financial support to the Republican Party — as an option for people who want to keep their money from flowing into the U.S. war machine, but who live outside the United States and don’t have any U.S. taxes to resist.

Iraqi-American Wafaa’ Al-Natheema has taken this one step further. She’s trying to boycott American companies while living in the United States — she won’t buy their stuff and she won’t work for them. That can’t be easy. She discusses her boycott on her blog.