Monday, April 18, 2005

The ignorance of most people about taxes astounds me. You hafta pay taxes… period. It’s a cost of living in the United States of freakin’-America. Now, you can pay Uncle Sam out of every paycheck… basically making installments on your yearly tax obligation, OR you can shaft Uncle Sam for as long as possible (three and a half months) and write him a check for the tax obligation in mid-April with no additional interest or penalties.

Now, some people brag about their tax refunds and how they snookered the Feds into sending them a big check. Listen, you ignorant boob, you just allowed the government to hold YOUR money for a year (and three and a half months) for nothing. To illustrate, let’s say you got a $1200 IRS refund. That means you OVERPAID your taxes by $100/month during 2004. If you had instead put that $100/month into a nice stable tax-free bond fund for a modest 3-4% return, you’d have an additional $30-40 in your pocket (counting the compounding during 2005 while you were filing your tax forms).

This may not sound like much, but it would be enough to buy an entry into the WPBT WSOP Satellite tournament at PokerStars.

Anyone who gets a tax refund is leaving money on the table… period. Granted, it may not be much, but when $33 can become $1500, and that $1500 can become $300,000, you shouldn’t ignore it.

7 Comments:

At 11:27 AM, Anonymous Maudie said...

You make a good point.. it'd be a no-brainer to calculate your withholding and then do what you suggest... alas I feel I've seen the last 'refund' year I'm likely to see for a while....

 
At 12:13 PM, Blogger Donkeypuncher said...

The problem is not merely an understanding about the tax system. It's that Americans don't know how to save money. Whether it's preparing for retirement or saving for a vacation, most people aren't in the habit of saving their money.

 
At 11:38 PM, Blogger Poker Gamer said...

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Travis

 
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