by
George Reisman
The Clearest and Most Comprehensive Contemporary Defense of the Capitalist Economic System Available
Posted on 01/27/2014 11:31:00 AM PST by edcoil
Just wondering? Thanks.
And is one key reason why many of them refuse to leave the cloistered bubble of academia, media, politics, entertainment or law.
More on Ruml. The germ of the withholding idea appears to be his.
http://www.amityshlaes.com/articles/1999/1999-04-15.php
“But even in this most patriotic of moments, it was not evident that Americans were willing to pay the new tax. In those days, taxpayers sent one big check to the government. And as spring arrived in 1943, it appeared that many citizens might not ante up and file returns. Henry Morgenthau, the Treasury secretary, confronted colleagues about the nightmarish prospect of mass tax evasion: “Suppose we have to go out and arrest five million people?”
Enter Ruml, man of ideas. Like other retailers, he had observed that customers didn’t like big bills. They preferred installment payments, even if they had to pay interest to relieve their pain. So Ruml devised a plan, which he unfolded to his colleagues at the Fed and to anyone who would listen in Washington. The government would get business to do its work, collecting taxes for it. Employers would retain a percentage of taxes from workers every week and forward the money directly to Washington’s war chest. No longer would the worker ever have to look his tax bill square in the eye. He need never even see the money he was forgoing. Thus withholding as we know it today was born.
To tame resistance to the new notion, Ruml offered a powerful sweetener: The federal government would offer a tax amnesty for the previous year. It was the most ambitious bait-and-switch plan in America’s history.
Ruml advertised his project as a humane effort to smooth life in the disruption of the war. He noted that it was a way to help taxpayers out of the habit of carrying income tax debt, debt he characterized as “a pernicious fungus permeating the structure of things.”
Ruml’s genius did not lie in inventing withholding, already a known, if largely untried, tax concept. His genius lay in packaging so clever it provoked envy from his peers. Randolph Paul, a tax authority at Treasury, wrote distastefully that Ruml seemed to have convinced taxpayers he had found “a very white rabbit”-a magic trick-”which would somehow lighten their tax load.” Ruml called his program not “collection at source” or “withholding,” two technical terms that might put voters off, but “pay as you go,” a zippier name. Most important of all was the lure of the tax amnesty.
Friedman was one of many lower level Treasury employees who worked on the problem.
I don't know that it was his idea or that he pushed hard for it, but I doubt he had the final say or that the Roosevelt administration needed to have its arm twisted to go with the withholding solution.
Not very many people. Perhaps Walter Williams and Thomas Sowell.
by
George Reisman
The Clearest and Most Comprehensive Contemporary Defense of the Capitalist Economic System Available
Something similar was said about William F. Buckley (by William F. Buckley, if I'm not mistaken). Saying markets are a good thing and should be freer isn't going to look like a strikingly novel idea right now. It's already been said too often by too many people and been argued and debated for too long a time. So there isn't a William F. Buckley (or a Milton Friedman) today.
Thomas Sowell
There is none.
However, a very wise man exists who will serve the position well. Thomas Sowell's observations provide the correct vision for the economy of a free people. While his mind remains razor sharp, he is aging and I suggest the search continue.
But let's not forget that he is the very man who invented the withholding tax [and sold it to the Roosevelt administration] and fully supported the idea [to his death] that government must remain in charge of the supply of money and increase it annually to maintain economic growth.
I don't dislike the old guy at all, but he wasn't as freedom-loving in practice as he sounds on those Youtube videos.
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