Hey Libs! A Great Tax Lesson of Oprah's "Free" Cars

They're not happy at the Oprah Winfrey Show. Well, some of the audience members have got those cars. This is a great tax lesson . They're upset. These people that got "free" cars? Basically it's going to cost them over $7,000 each to get the free car, because the cars are worth about 30 grand. So that 30 grand is going to be added to their income this year. That's 30 grand in addition to whatever they make at their jobs, or if they don't work it's 30 grand of income, period. They have to pay income taxes going to bump them up into a higher bracket more than likely, then there's the sales tax. So these freebie cars are going to cost these people, some of them are upset about this, and some people are saying, "Well, where am I going to get $7,000 to pay taxes?" That's exactly what I think every taxpayer needs to face.

(NBC: Recipients In Oprah's Car Giveaway Face Hefty Taxes)
(Chicago Sun-Times: Oprah's car giveaway not totally 'free')

One of my points always has been that most people don't know what they're paying in taxes. I do this test all the time. I go ask somebody that seems to be doing well, "Do you know what you're paying in taxes?" No, I usually get a refund. You what? "Oh yeah, I get a big refund. I get a big refund every year." Well, you don't know how much you're paying in taxes? "No, it's withheld from the check. I'm doing okay." So you don't even know how much you're paying in taxes? No wonder when tax cuts come along people don't get revved up about it because they don't even know -- and especially if they're goofing up, and I do mean "goofing up," if they're goofing up arranging their affairs so they get a big refund, they really have no idea how shafted they're getting, or being. I've run into so many people get a big refund check. "I can't tell you how I'm screwing the government. Look at my refund! Ha-ha! Look what they have to give me back." The truth is, look at how much of your own money they kept all year, and they gave it back to you with no interest, and you think you screwed them? You try not paying them for one month and find out what the interest is gonna be. You don't pay 'em for a month. You think you're screwing the government, you're getting shafted by the government in more ways than you can count on Sunday.