There's a form the employee fills out detailing how much to withhold during the year. Most people use the default, which is to withhold the most, thus those th

There's a form the employee fills out detailing how much to withhold during the year. Most people use the default, which is to withhold the most, thus those that get a refund are overpaying their taxes over the year. Prior to WW-II, everybody had to file quarterly income tax payments. It was during WW-II that withholding became a thing (maybe something to do with increasing monetary flow towards the government or something). It remained a thing afterwards. Because of the withholding, most people are unaware of exactly how much they are actually paying in taxes, especially given the "windfall" every year of refunds. "Woo hoo! Gubment gave me money!" and all that.