Would a shutdown of tax refunds cost you a government service, or your own money?

How you look at things.
April 8 2011 8:35 AM

Refund Madness

A government shutdown would stop tax refunds. But that doesn't make them a government service.

President Obama. Click image to expand.
Barack Obama

Seventeen years ago, during the health care debate that preceded the last government shutdown, a woman famously told her senator, "Don't you let the government get a hold of my Medicare." That line is now a common joke, used to illustrate conservatives' blindness to their reliance on federal programs. President Obama repeated it two years ago, citing a letter he had received from a similar woman: "She said, 'I don't want government-run health care, I don't want socialized medicine, and don't touch my Medicare.'" Obama's audience laughed.

Now Obama and the Democrats have created a liberal version of the same joke: Don't you shut down the government and deprive me of my tax refund.

The 1995 shutdown took place in November of that year. But this year's shutdown debate has unfolded in April, giving Democrats an opportunity to speak up for taxpayers. On Wednesday, Sen. Jon Tester of Montana sent out a press release fretting that a shutdown would lead to "the IRS suspending refunds to taxpayers." Sen. Ben Nelson of Nebraska warned that "tax refunds will be delayed." Rep. Ben Chandler of Kentucky protested that "many parts of the government would be affected." Among them: "Tax refund checks could not be processed."

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Obama and his aides have featured tax refunds in their prophecies of apocalypse. At a Wednesday briefing, White House officials said a shutdown would delay refunds. That evening, to illustrate the importance of keeping the government open, Obama cited a Kentucky man who was "counting on his tax rebate … and he might not get it if the government shuts down." And at Thursday's White House press briefing, a deputy director of the Office of Management and Budget repeated that a shutdown "would have very real effects on the services the American people rely on." For example, anyone "filing paper tax returns would not receive tax refunds."

Logistically, this is true: A shutdown would suspend the issuance of refunds. But in making this point, Democrats have blurred the distinction between getting a tax refund and getting a subsidy or other federal benefit. They lump tax refunds together with federal paychecks, government-backed loans, publicly funded health research, and the operation of national parks. In the administration's words, tax refunds are just another "service the American people rely on."

Liberal pundits blur the distinction further. On Wednesday, an economist from the Center for American Progress described the effects of a shutdown this way: "The federal government does a lot of things that affect people's everyday lives. We heard about it in the segment, as the president just said, you know, people wanting their tax refunds." Hardball host Chris Matthews added:

800,000 federal workers would be furloughed … pay for our troops would be halted, IRS refunds to people will be suspended—in other words, the checks won't go out—Federal Housing Authority loans, FHA loans, interrupted … passports would go unprocessed, and unemployment benefits might be suspended. So that's a lot of action … for the Republicans. Do they really want to kill government?

It's one thing to observe, as an empirical fact, that tax refunds won't be processed if the government shuts down. It's quite another to list tax refunds alongside unemployment benefits and federal paychecks as an example of things Uncle Sam does for people—things we'll lose if Republicans succeed in their campaign to "kill government."

Tax refunds aren't a federal benefit. For most of us (setting aside the few who get back more than they pay), tax refunds are your own money, owed back to you by a bureaucracy that, by its own reckoning, should never have taken it. And anyone who holds them up as an example of what the government does for us is as blind as that lady who wanted the government out of her Medicare.

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