Some Taxpayers Voluntarily Have More Taxes Withheld from Their Paychecks

question 69

Essay

Some taxpayers voluntarily have more taxes withheld from their paychecks during the year in order to receive a large tax refund once a year. These taxpayers give the government an interest-free loan and lose the interest they could have earned by saving a portion of the larger paychecks they would have received during the year. Why might a person make this choice? What does this choice say about the theory of the consumption function?

---

Definitions:

Writ of Certiorari

An order by a higher court to review the decision of a lower court or administrative agency.

Appeal by Right

The statutory right to have a higher court review the decision of a lower court, typically guaranteed without the higher court's discretion to deny the review.

Voir Dire

A legal process of questioning potential jurors by the attorneys and sometimes the judge in court to determine their suitability for jury service.

Peremptory Challenge

In legal trials, the right to reject a juror without needing to provide a reason.