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Loans to Government

Heh.

The size of state income tax refunds swelled to $1.86 billion last year, in part because the state for years didn’t update how it withholds taxes, a new report says.

The increase means taxpayers got more money back - $749 each on average last year - but that in doing so they provided the state with a large, interest-free, short-term loan, the Wisconsin Taxpayers Alliance says in the report released Monday.

“For those who welcome large refunds, this could be good news,” the report says. “For those who realize they are giving state government 10-figure, interest-free loans, these facts might be more unsettling.”

Refunds last year on average were equal to 28% of the amount taxpayers had withheld from their checks throughout the year. Through much of the 1990s, refund checks on average were 15% of withholdings - about half the size they are today, according to the taxpayers group.

This will become an even bigger problem if the state doesn’t have the money to issue the refunds - as has happened in some other states.  I’m usually pretty happy when we end up owing instead of getting a refund.  This year we owe a bit more than I would have liked, but that’s better than giving the government an interest free loan.

Posted by Owen at 0720 hrs
Economy + Politics + Politics - Wisconsin

1. I have been harping on people for years to stop giving the government interest free loans. Even a savings account at .7% interest is better than that.

   Posted by .(JavaScript must be enabled to view this email address) on April 06, 2010 at 2047 hrs
   
   
   

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