Heading Into April 15, Tax Refunds Surge, As Net Treasury Tax Withholdings Plunge

Tyler Durden's picture

We here at Zero Hedge have gotten tired of the endless propaganda and lies coming from the US Treasury regarding its "prudent" cash management. As we demonstrate weekly, gross tax withholdings have collapsed in 2010 compared to the even disastrous 2009. Through the 14th week of the calendar year (not fiscal), cumulative tax withholdings in 2010 are $477.9 billion, $13.5 billion less than the $491.4 billion in 2009. Yet regardless of what the only organic source of revenue for the Treasury looks like, the Treasury (and IRS) are issuing ever increasing tax refunds with the abandon of a drunken sailor. The chart below compares how many more refunds on a cumulative basis have been issued in 2010 compared to 2009. Oddly, it is also $13 billion, however in the wrong direction.

A side by side comparison of weekly individual refunds indicates that as we get closer to April 15th the government is putting ever more money in the pockets of taxpayers. The week of April 9, 2010 saw 21.5% more refunds in 2010 compared to 2009.

Net out refunds from gross withholdings, shows just how blatant the lies is that the Treasury is collecting more money than previously. On a cumulative basis 2010 compared to 2009 has seen a net $26.5 billion less withheld by the Treasury. We fail to see how this number is in any way an indication of efficient money management. Coupled with record unemployment benefit outlays, surging discretionary spending, and record net bond issuance, and the US Treasury is rapidly realizing that should it be unable to fund itself using its Bernanke-Jiabao Tungsten credit card, it is all over.

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Sudden Debt's picture

Who needs tax income money when you got a turbo charged pinting press and enough national forests to supply them from paper from here till eternity!

cougar_w's picture

Finally! My stimulus check!

Wait. That's my own money. Damn.

Hephasteus's picture

These big business cycles cause 2 things. People out of work clawing back past income taxes. Not so bad the 1st year but the 2nd year is when it starts having very significant problems. Soo. It's double dip time followed by massive consumer clampdown.

MsCreant's picture

Dear Tyler,

I am putting on my Satanna costume to pose this question.


It is already over. It would appear that not only is it the case that the bigger they are, the harder they fall, but the bigger they are the longer it takes for them to finish falling. There is life to live still inside the Wile E Coyote, cliff hanger moment. We are not suspended in time, we just haven't gone "splat" yet.

You have an army here. I wonder how you would mobilize us if you could get us to move in some (any) kind of a direction? Is there a "getting out of the way" or "starving the beast?" Is there victory to be had? Survival?

Ya'll do a lot here. Fervently, visciously, as if you had hope.

Tyler, do you have hope? Why do you do what you do at ZH? I love it, I am not complaining, but one of us little space monkeys needs to ask your sweet ass just what is up?

If you have hope, I dare you to write us about that. Spill it.

Hephasteus's picture

Nothing to do. I don't want to take over the government. Do you? Although at this point just about any honest educated person could do a better job. It's just a scam. Too many people have seen it and know it for what it is at this point. Cat's out of the bag. All you can do is keep a close eye on government. It's all a battle of wills. If they get a few people to fight but not many they will go brutal on us. If they get massive resistance they won't. As much as people say we are just a few nutcases. It's much much much more widespread than that. They can't even get half the people to answer the census form.

So all you can do is be prepared for economic collapse and if you see drug gangs or gangster actvity in your neighborhood give em a few double taps in the chest. If you see the army in the streets. You're not going to survive so nothing makes sense but to make an enemy an enemy. They will hang on by the skin of their teeth till states start crumbling.

I'm really proud of my state. They got the big government pressure and fought back. If at least more than half the states do as well it'll be alright. It's like the iranian saying. "Death to blahlbah" It doesn't literally mean death. It's just a curse against something that is out of control. So when they say death to america they don't mean death as in dead. They mean death to us being out of control.Other countries are scared but as long as WE don't let them walk all over us they will be there to help. Until then it's just that tense situation of a wounded animal. People will stand up and get this crap back under control and likely learn some good lessons about not letting things get this far out of hand ever again.

DFCtomm's picture

Do you honestly think the army is going to fire on civilians? When I got out of the army I did my stint in the reserves. Law enforcement wanted to use our aircraft to hunt for weed. They got fired on by the pot growers, so the next year they decided it would be a good ideal to load live rounds. The first sergeant of Delta refused citing posse comitatus. It got hairy but the police types backed down. That's our military! If orders like this came down it would rip the military apart, and render it nearly worthless. If you want to worry about something worry about the cops, but don't worry about the military.

Shameful's picture

Do you really think the order will be "Boys the citizens are having a tax revolt we got to go kill them!"?  Hell no, give the guys some credit.  What will happen is they will stoke the fires with taxes, price and wage controls.  When people get hungry and feel they have lost to much they will likely riot, most likely in a summer when they are hot and have limited access to power.  Imagine most of the SW without AC in the deep of July, and then have bread and fuel lines.  Odds are they will let the riot go on for a while and eventually the army will get called in to "restore order".  After a few times of that and angry hungry people taking shots at soldiers I'm pretty sure they will get people willing to fight, or at least do gun confiscation to "keep the troops safe". I'm not saying this will happen, merely it's a possible scenario and one I think the military could be used to support the civil authorities in the case of civil unrest.

Also you speak for the army, will the CIA or mercs use drones on US citizens?

macfly's picture

I'm afraid they will, and worse. 

They are deadly serious about the New World Order. They have the Fed, the IMF, and the UN. We are witnessing an incredible silent coup in action. By destrying money they destroy our power, our freedom, our voice. They'll drive us crazy so they have a legitimate reason to put us in our place with martial law. Then they'll start a war to rally everyone behind the flag.

They aren't giving it up, not without a hell of a fight, and it is a fight that we the people couldn't possibly win, even if we were all aware enough to realize what is happening to their beloved country. Sadly too many are not paying attention, or are all caught up in the left vs. right puppet show in Washington to see what is really happening.

Change will come, but not till after we loose the huge war they are going to drag us into, when they have broken everything.

All we can do is be very, very patient, because the time of the good will not return until after their ultimate defeat. Like Napoleon and Hitler this hideous band of Fabianist - Collectivists will not go quietly. 


nedwardkelly's picture

Do you honestly think the army is going to fire on civilians?

My coffee almost came out my nose when I read that bit. Do you honestly think that anyone that organized with the intent of overthrowing government would be called a 'civilian'? I'm pretty sure they'd very quickly be labelled a 'Terrorist'.

There's plenty of good military folk, I know quite a shit ton. I wouldn't be scared of any of them. How about the clown behind the 30mm cannon on the apache in the wikileaks video though? He'd be sitting up there just hoping for an excuse to shoot you, after all, you're a terrorist. How many more are there like him?


Cognitive Dissonance's picture


Thanks for verbalizing what a few (or more) of us have been thinking about.

In fact, I've been thinking about your question(s) for a while now. While there is a constant barrage of disclosure and revelation from Tyler & Company, there is little to no editorial about the ultimate goal and intent of the disclosures. After a while, there must be a purpose to the constant bleeding of the Ponzi pig by ZH or the readers begin to feel it’s hopeless.

It's one of the reasons I decided to change my tone a little with my last 2 articles and strike a more positive note of real hope and expectation that progress can be made rather than my normal explanation and exploration in the how and why of the human mind. This blog has been drifting aimlessly lately and it has begun to concern me and it appears you as well. Like you said, it's clear a lot of work goes into these stories but something is missing lately.

You hit it on the head when you ask the only question to be asked under these circumstances. “Tyler, do you have hope?” One of the conclusions I've come to is that Tyler and Co had hoped that more MSM media would have picked up on the constant Ponzi exposure coming from ZH by now. Other than a few stories, not much has progressed, which may have had a deflating and demoralizing effect on the crew. IMHO this helps explain the near total absence of Marla (other than the brief appearance 2 Friday's ago to spin some tunes) as well as Tyler, who used to pop in now and then in the comments section but does not do so as often, thou I may have missed something along the way.

The emotional and psychological profile of the whistleblower is that of one with a higher than normal sense of duty and moral outrage and the expectation for others to be the same. After the whistle has been blown and nearly everyone around does nothing, or worse, deliberately works to ignore the information, it cuts to the core of the whistleblowers’ sense of purpose. It's difficult to acknowledge that there's more going on here than simply a lack of real information keeping the general population from demanding change. It's doubly disturbing to understand that the only thing worse than the Ponzi is people who are being screwed by the Ponzi yet willfully and consciously decide to do nothing. I have other thoughts but I'll shut up for now.


Marvin_M's picture

CD, as a long-term reader of ZH and a recent joiner I too have noticed the overwhelming amount of flailing about that occurs in these hallowed pages (a day without several hours of ZH just sucks).  The utter dispair shared by the ZH blogger army does, in my humble opinion, have an upside but it comes with a very big "IF".

IF leaders with moral courage and honesty can be given our support to the detriment of the current crop of the lying, corrupt and morally bankrupt ruling regime, then we may stand a fighting chance.  Enter blogs like ZH where the underlying theme and purpose of Tyler's agenda is to expose and tear down the corrupt regime so that people will again have the wisdom and strength to jail the guilty and elect a legitimate government.

This is the only hope we have.

Rusty_Shackleford's picture

"The individual is handicapped by coming face to face with a conspiracy so monstrous he cannot believe it exists." - J. Edgar Hoover

macfly's picture

There is nothing we can do except listen and learn, we cannot use the courts, the political system, and certainly not the pitchforks. We have to soak in, and then share this knowledge. I believe reading ZH, 13 Bankers, Naked Cap etc, etc, is the most patriotic thing I can do now. It is only by understanding what has really happened that we can align ourselves with the new, the next, as they start to stand tall. 

I have been very impressed with Simon Johnson's talks around the country, which are easy to see online. Those to align oneself with are appearing slowly, but it is only with fastidious study of this blog, Reggie, Roubini, Yves etc that we can learn to recognize who and what is really right.

We the nation have sleepwalked for too long, it is time to wake up. Zero Hedge is waking us up, but you have to shake a giant many, many, many times, and shout very, very loudly to wake him up, especially after fifty years of debauchery.



Marvin_M's picture

hear, hear!  but we can actively support leaders we trust and vote for integrity..agree this is not easy...

litoralkey's picture

Tyler Durden(s) might be Asimovian futurists, in the Hari Seldon mold of a thousand years of darkness before the real intentions are revealed to the pawns on the chessboards.

And when I saw pawns, I mean you.


Fish Gone Bad's picture

If you want to win a war, enlist the help of kids.  They can be very creative. 

lawton's picture


Shameful's picture

I can see the spin now "More tax refunds going to consumers!  Green Shoot!  These consumers are already on the way to the malls right now!  Green Shoots!!!"

Why do we have taxes anyway?  With the Fed having the printing press in overdrive why not drop the tax rate to 0?  Zimbabwe Ben is going to drown us infinite QE anyway so why even collect taxes, that's just an unneeded bureaucratic cost.  Fire the IRS and look to Zimbabwe Ben for salvation.

Hansel's picture

+1 quadrillion, 47% o' peeps don't pay no income taxes ne wayz, why I gotz two?

AndrewWJewell's picture

black helicopters are coming for you, they should be there shortly

Shameful's picture

Good! Hopefully piloted by Zimbabwe Ben, and full of Fun Bux!  I'm over here Ben!  Toss those Fun Bux out in my direction!

dondonsurvelo's picture

One of my $14 an hour employees just got her tax return and she bought a 52" LCD TV.  As her employer and someone that makes a very good living, I still have my 2001 37" Sony Trinitron. 

nedwardkelly's picture

Why do we have taxes anyway?

That's what I was thinking here... We're talking about a $13bln difference. Who the F cares about $13bln when the gov is burning 10X that every few weeks.

Rainman's picture

The tax refund graphs make sense due to Schedule M credits, cap loss and an interest income nose dive.

The tax witholding is where the devil is really hiding. That ain't good for Uncle Sugar.

Pesky Bill Gross will have to be re-educated on the wisdom of buying up more UST debt at premium price....despite lowered revenue. China too. Little wonder they're wandering away. They actually think higher interest rates are coming.

Pretty soon it will be just Bennie and the Banks.

throwthebumsout's picture

I am not the least bit surprised at these results. All the people that work on commission and for themselves took a hit at the end of 2008.  Now we are seeing the impact of a full year and continuing job losses for 2009.  

I expect that the "earned income tax credit" is being used at an exponential pace.  The EITC is for people making less than $35K.  It is a refundable credit, which means the IRS will send it to you in a refund, even if you don't owe any Federal tax. For example, a couple with 3 kids with a household income of  $14K to $21K the credit $5,657. It is a entitlement program disguised as tax credit.  For tax year  2008, EITC was a $49.3 Billion (see http://www.irs.gov/individuals/article/0,,id=177571,00.html). 



Rainman's picture

Hahaha....forgot about that EITC !! Forgot you can get a tax refund on a tax you never paid in the first place. An excellent back door welfare plan.

Even the charities are in on promoting the EITC. I saw a United Way ad on it the other day.

I'm not knocking help for people at this income level. I just think entitlement payments should be made straight up and never disguised as a tax refund.

But who am I to expect full accountability ?? 

nedwardkelly's picture

I just think entitlement payments should be made straight up and never disguised as a tax refund.


Right, call a spade a spade FFS. This way that can talk about the 'tax cuts' they made, without people accusing them of just handing out money. It's crazy to me that net someone (anyone) can pay negative taxes, but that's our reality. What a joke.

Rusty_Shackleford's picture

"It is a entitlement program disguised as tax"



Janice's picture

Or, it could just be that those who owe taxes wait until the very last damn minute to pay it.

Cognitive Dissonance's picture

I don't know of very many self employed people who pay taxes owed sooner than the week or so before April 15th. I'm sure there are a few but many people just don't like paying Uncle Sam any earlier than they must. I'm waiting until the last day myself and have been doing so for over 20 years. Same for many of my self employeed clients.

MsCreant's picture

I joined this club this year. I ain't paid my taxes yet. This year is the first time I will owe, ever. I used to be a good girl who claimed 0 exemptions because I wanted to be sure I was paying all I owed. They don't give a shit, but they lost that from me. It is one of the reasons I am now a MsCreant. 

I don't have to be good. They lost a good neighbor and supporter with their bullshit. I used to want to be good, took pride in being good. THAT IS WHAT THEY HAVE REALLY DESTROYED. They destroyed the faith that I had that while there were a few bad apples, most of them were trying. They destroyed my enchantment with the idea of the American. They destroyed, to tell you the embarrassing god honest truth, a kind of innocence I used to have.

I never believed in Santa. But I did believe in our government. Sad, but true. I had a hell of a civics teacher in high school. I drank that Kool-aid deep. 

You don't have to be good. They blew the social contract sky high. The social contract was the mechanism of exploitation itself--middle class morality. I can see why many here have decided they will cheat. I won't judge them. They are no different than those who betrayed us after they were elected. It is one way not to feel like a chump. I'm not there yet, but I understand.

Cognitive Dissonance's picture

Once again you bare your soul for the readers. Thank you.

litoralkey's picture

I know several dozen small business owners and self employed salesmen who pay income taxes early... all for a similar reason.... unknown and highly variable income streams due to the nature of their businesses.... it's easier to keep a small rolling credit for the quarterly estimated taxes with the IRS and state tax authority, and loss the $50 - $100 a year in bank account interest than lose tens or hundreds of hours of worktime and and associated costs due to an audit.




Cognitive Dissonance's picture

Maybe I'm missing something here but how does paying your taxes early (or making sure you have a credit to fall back on because of an uneven income stream) decrease the chances of an audit? For myself, it has nothing to do with holding the money in my bank account to "earn" more interest and everything to do with simply not paying in advance.

As long as I haven't under withheld (or under paid estimated taxes) during the year by more than 10% of the prior year tax liability, I'm not subject to penalties nor interest on the final payment that I don't pay until now. This also doesn't flag me as a problem. I would like to understand your reasoning.

nedwardkelly's picture


Or, it could just be that those who owe taxes wait until the very last damn minute to pay it.

I just paid mine two days ago. I owed a reasonable chunk, there was no way I was going to pay it any sooner than I ought to. When I read about how some state were withholding tax refunds (I'm in NY) I actually got all my taxes done super early to avoid the wait, but when I discovered how much I actually owed it just sat waiting for closer to the 15th.

Screw giving these asshats $$ any sooner than I had to.

banksterhater's picture

Has anyone added up the 5-year TAX LOSS CARRYBACKS? The TBTF homebuilders are milking this bigtime. Who else? (3-yr carryback was the historical norm, right?)

KBH only milked $191million in tax credits for BOOM years 2004-5>>>

"New tax legislation that allows homebuilders to extend the carryback period for booking operating losses has boosted builders’ profits. The $191.7 tax benefit blunted KB Home’s 27 per cent decline in revenues, which fell to $674.6m.
Excluding the tax benefit, KB Home lost $91m in the quarter."

Ned Zeppelin's picture

Huge scam passed when the tax credit for homebuyers was passed.  I think Pulte was the big winner. http://www.calculatedriskblog.com/2010/03/home-builders-23-billion-gift-from.html

ring a ding ding $450MM for Pulte the biggest take of all.

Bob Toll laughs at you in between taking bites out of a freshly killed infant.

JR's picture

Here’s Nate’s tax take today on withholdings:

Remember this little gift from heaven, The American Recovery and Reinvestment Act of 12009?  Yeah, the one that was going to save you soooo much money in taxes that they adjusted all the withholding tables to take less out of our paycheck?  Guess what, it’s now time to pay up.

After completing my 2009 taxes I can attest that they under withheld to a very large degree.  If I’m even close to what others are experiencing, then expect a surge in IRS receipts and expect the consumer to have less money than they thought they did.

So you had Easter shopping come in March, that will be a drag on April, and you are going to have a big tax anchor moving forward, both as people send in what little money they possess, and readjust their withholdings going forward.  This to send money to a government that passes it along to the banks who control the world and collect interest from the bonds they issue all the while robbing Americans every step along the way – the Jefferson County example is a good one.  Wonder why your utility bills are so high?   Wonder why we are spending hundreds of billions on interest expense while losing funding for actual things that benefit the majority who comprise society?

There’s more to the story at:


Ned Zeppelin's picture

I got whacked - underwithheld and the AMT socked me as well. Ouch.  I'll be hitting the send button Thursday and bidding adieu to about $8,000 more FRNs, in addition to the tens of thousands already paid in. And as you say will be adjusting withholding up slightly to avoid the surprise next year. Hey, enjoy everybody! It's a party.

JR's picture

When government policy now accelerates the transfer of wealth in our society, it’s a little difficult to admire the “integrity and fairness to all” message from the IRS when whacked for another 8K atop tens of Ks.

But to show that Obama’s Commissioner of the Internal Revenue Service, Douglas Shulman, has a sense of humor (ha ha), the front of his 128-page 1040 instruction booklet for 2009 features the We the People portion of the original handwritten copy of the Constitution, lying atop the American flag.

These words to Dear Taxpayer, from the Commissioner, launch us on our journey: As another tax season begins, the IRS wants to make filing and paying your taxes as quick and easy as possible… We want to help you successfully navigate a highly complex tax code and pay what you owe under the law—not a penny more, or a penny less.

The American people who play by the rules every day further expect the IRS to vigorously enforce the tax law.  Rest assured, we are pursuing those trying to evade paying their taxes…

In addition, the Earned Income Tax Credit was increased for families with three or more children, while the marriage penalty was reduced.  Eligibility for the Additional Child Tax Credit also increased, meaning millions more low-income earners can claim it (emphasis mine)


Douglas H. Shulman

The IRS Mission graces the bottom of the letter:

Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all. (emphasis mine)

Whiskey, gin and brandy
With a glass I'm pretty handy
I'm trying to walk a straight line
On sour mash and cheap wine
So join me for a drink boys
We're gonna make a big noise
So don't worry about tomorrow
Take it today
Forget about the cheque
We'll get hell to pay
Have a drink on me
Have a drink on me
Have a drink oooooooon me!!!

Village Idiot's picture

Here's a positive for the "starve the beast crew" - just got word from my CPA that 2009 is the first year that I will be able able to avoid all state and federal income tax on my net income, through a maximum contribution to my defined benefit plan. Self directed.  If you self employed types haven't looked into a plan of this nature, talk to your CPA.

JiangxiDad's picture

My current survival strategy (pre- 59 1/2) is completely opposite. No more retirement contributions of any kind--too afraid of possible w/drawal difficulties. Get out of any retirement/college savings accts w/out penalty--if possible. Even cashing out of contribution portion of Roth Ira's.  Keep small cash balances in bank. If necessary, but not yet, take penalty and get all retirement money out. To think that the US gov't has so destroyed the faith and confidence of the citizens that some would even contemplate the above brings tears to my eyes, and rage.

Mark Beck's picture

The gyrations in the "plan" when it comes to tax law, is up to the whim of the politicians, who stake their claim to this or that in the tax code as their own. So what we get in the end is complexity.

However, I think the new requirements for offshore accounts for income earned outside of the US is going too far. I am waiting for this to be tested in court. To require a US citizen abroad to pay tax when yearly residence is outside the US, is an afront to international law and sovereignty, and completely unfounded.


Tax receipts tell the real story about the Governments ability to pay. Which is why for a debtor nation, it is a better barometer of success than GDP, relative to the amouont of debt owed.

In a system of sound money, fiscal and monetary policy would be centralized. Under our current structure this would be at the Treasury. There would be no central bank like the FED. Money would be spent into existance, and not created from debt. The representatives of the people would be tasked with balancing the budget on a yearly basis, and any new programs would have to be fully funded through existing revenues, or a one time tax (with majority vote) to cover the project at the federal or state level.


If the April 2010 tax receipts are below April 2009, then the relative change in GDP numbers that we have been seeing is growth through Government stimulus, and nothing more. There is really no way to claim any growth when the revenue side is so bad. I am interested to hear how the administration spins this outcome into recovery.

The real problem with the rhetoric is the amount of time that has passed relative to historical recoveries, in the presence of massive stimulus and price manipulation by the government. The magnitude of the "recovery" does not correlate to the amounts invested. The administration needs to come clean with the American people, and let us know what we have looking forward, and how we should prepare.

Mark Beck

mikla's picture

...the US Treasury is rapidly realizing that should it be unable to fund itself using its Bernanke-Jiabao Tungsten credit card, it is all over.

+1, Such prose ...

Al Huxley's picture

Share the plunder.  If the US is running massive deficits, only fair that some of it gets back to the average joe.  This is consistent with my general contention that if the IMF bails out Greece, it doesn't affect the American taxpayer, because at this point everything that happens is just debt traded for debt.  Until we have a REAL shortage in something people really need (food, oil, etc.) nothing will be resolved.  But that will be the tide that Buffett refers to when talking about the tide going out to find out who's swimming naked.  How excited will people be to bail out Greece, or fund US deficits if the choice is between that and eating?  Not so much is my guess.  On the other hand, how much food will the US export if the domestic population starts to experience shortages?  Again, not so much...

Marvin_M's picture

speaking from the personal experience of a former well-compensated over achiever who now finds himself 1 year + without a paycheck, I got a whopper of a tax refund on my 2009 taxes.  2008 was a great year for us international sales types so bonuses paid early in 2009 were not bad at all.  At our company these bonuses were automatically taxed at higher than normal federal rates.  When the ax fell also early in 2009, folks like us got separation payments on the order of 6 months pay and more, again taxed at abnormally high rates as dictated by our accounting folks.  Many of us also were forced to sell our stock options and that was taxed at higher than normal rates as regular income.  It all adds up.  I can live for almost 6 months on my federal and state income tax refunds if I continue to spend like the pauper I now am.  Next year should be another story altogether...

Bear's picture

Thanks for this decidedly bullish news.

DeltaDawn's picture

I recommend you all go plant a garden. Get productive instead of hand-wringing. Build your home reserves, gather your friends, eat healthy and move if you don't live in a safe place. It will be a stressful decade so fortify yourselves. Your community of like-minded friends will be your biggest asset.