Yes I’ve been writing big checks to my friends at the IRS for decades. I could never understand the refund thing.
Although in this era of trivial interest rates you’re not gaining much.
Agree on the interest side...but the idea that they cannot toy with your refund (as we, effectively, got it over the calendar year by under-withholding) is certainly sufficient reason.
...and now with Obamacare, it make A LOT MORE SENSE to under-withhold for people that aren’t signing up for that crap (i.e., young, healthy, people). Even to the point of taking some penalties for under-withholding (if their income isn’t predictable). And that’s because withholding of tax refunds is the ONLY WAY permitted to collect the non-insured penalty (at least until our dictator changes the law on its own)...so you’d be crazy to make it easy for them.
If you get a refund you gave the gubmit an interest free loan for last year. If you pay that money it is an interest free loan from the gubmit. Optimally you can withhold up to 90% of what you will pay in tax without penalty.