The Unrepentant Individual

...just hanging around until Dec 21, 2012


February 4, 2007


Cut Withholding To Create Libertarians

Tonight, the wife and I were working out our taxes using TurboTax. Our taxes aren’t very complex, so I don’t feel the need to employ too much help to understand the byzantine tax code we live under.

Well, I am usually not very good at saving money for rainy days, so I tend to manage my finances to ensure a refund at the end of the year. I still check each time to see how much ends up getting paid to the government. This year, adding in the employer contribution to SS and Medicare, it works out to a pretty sizable 5-figure number. Now, I’m not a rich man. While I make a pretty decent income, my net worth is barely positive. Yet I pay taxes like a rich man, and it makes me angry every year.

My wife, on the other hand, doesn’t have the same level of anger. She looks at our refund (about $2K this year), and thinks “oh well, at least we didn’t have to pay!” We’re planning a trip to Mexico, and she sees this refund as the quick and easy way to pay for the trip. We get $2K back on a total payment of $25K+, and she’s happy about it.

So here’s an idea for all of you readers, or at least those who are married folks who don’t have spouses of libertarian bent. Start claiming too many dependents on your W-4. Work it out so you owe every year. It won’t take long before your spouse is complaining about taxes, when he/she is scrambling to find $2K instead of trying to figure out how to spend the $2K the benevolent government is sending you.

Posted By: Brad Warbiany @ 12:24 am || Permalink || Comments (4) || Trackback URL || Categories: Libertarianism, Personal Life, Taxes

4 Comments

  1. If you under-withhold on your federal income tax, then you are subject to tax penalties. The IRS expects and requires you to plan on receiving a refund.

    There are exceptions (e.g., if you withheld more this year than last year, then you don’t face a penalty regardless of how much tax you owe this year).

    Claiming too mnay withholding exemptions also increases your risk of an audit, and penalties if you’re caught.

    Comment by KipEsquire — February 4, 2007 @ 7:39 am
  2. The only tax cut I have seen visible is when the FED’s wrote that one time check. Reagan’s tax cut gave me three dollars a week and took it away at filing time. I aways calculate the the percentage of taxes I pay and I have yet to see any tax cut. The Republican tax cuts for me has aways been BS. I guess it was because I never had a six figure income or either half of that.
    I would favor absolutely no tax breaks for anyone and a flat tax. I think though I would quibble with the percentages I have seen suggested.

    Comment by VRB — February 4, 2007 @ 8:28 am
  3. Kip is right, under-withholding gets you in trouble. I know from experience. It’s not enough to simply write them the check you “owe” them, they get uppity that you dared hold onto your money until tax time.

    I was hoping you were going to talk about ending withholding, where withholding was either (1) the paycheck-by-paycheck withholding altogether! Imagine having a $25K “bill” due in April entirely; or (2) sending hordes of attractive libertarian women (and men!) out to convert new recruits in the oldest method possible.

    Comment by Sam — February 9, 2007 @ 10:55 am
  4. Sam,

    I advocated part 1 two years ago

    You even commented on that post!

    But tell me more about option 2… I’m intrigued.

    Comment by Brad Warbiany — February 9, 2007 @ 10:59 am

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.