Discussion»Questions»Finance» Generally, does the US government benefit* more when taxpayers owe it money when filing annually, or when it pays those who overpaid? ~
Generally, does the US government benefit* more when taxpayers owe it money when filing annually, or when it pays those who overpaid? ~
*The word benefit has a variety of definitions and/or ways it can be applied, not just financially. Please consider a broad interpretation of the word in regard to the question. Thank you.
You see it's like this... a certain amount is "withheld" from each person's paycheck (despite what people may think, the "F" in FICA doesn't stand for the word used by people when they see the amount that was withheld). Anyhow, all that money is put into stocks of high trading companies like Amazon and Apple (which is held overseas where there is no tax, therefore Uncle Sam never has to pay taxes on his stocks). So when it comes time to pay back any "overpaid tax (which, if you'll note, is alway paid after the first of the year so as to always maximize the amount back from their stock purchases), the feds have already accumulated massive profits that anything they are "forced" to "pay back" is a mere pittance in comparison. If they did not withhold any $$ and then forced taxpayers to pay it all back in a lump sum, the federal government would go broke. Oh, and if those stocks happen to go down over the course, they quickly raise the debt ceiling and blame any losses on Dave in accounting for giving them bad stock tips (thanks a lot, Dave!).
Shuhak 