In light of Tax day here in the US. I wanted to point out as The National Center for Policy Analysis does. Your refund is nothing more than an interest free loan to the government. You over pay your taxes all year and get change early the following year. For some this is a windfall because they actually get all their money back and then some, meaning it is a way to cover up government handouts in tax language.
As the NCPA points out…
There’s some research to support tax refunds as a way of encouraging saving: Economists have found that people are more likely to spend $500 if it shows up as an extra $20 in every paycheck than if it arrives as one lump sum.
But, I assume if you are reading this you can probably do better than Uncle Sam with your money. Remember you can always get more money in your paycheck by reducing your withholdings according to the IRS’s own calculator.
Read the article here…