I don't know how many people will be brave enough to answer your questions.
The way this is worded - "So I am just wondering how many people think withholding is paying taxes and refunds show a lower tax rate and why? Because that just isn't how the system works" sounds to me like you're asking "What the hell is wrong with you people?" :)
For the record, I agree with you. It's pretty simple really. But not everyone is as smart as we are. Just the other day I was at a store returning a sweater my daughter didn't want. I paid in cash and was due $23.94. I handed the cashier a penny and said, "I'd rather not get 4 pennies!" She proceeded to hand me $23.94, and then looked little confused and then gave me another penny. I handed her the 5 pennies and said, "That's why I gave you a penny in the first place, so I wouldn't get anymore. Could I please have a nickel?" Honestly, she looked at me like I was crazy! DUHHHH!!!! Sorry for the story. Just thought I'd share how dumb some people are.