However,
Our budget problems and over taxation isn't due to how taxes are collected, it's because of how it is spent!
The budget problems are a result of how taxes are collected. If we had been collecting taxes differently since 1913 - say with no withholding and have people paying in lumps sums every month or year - then the problems you're describing would not be as they are.
You cannot separate the method of collection from the resulting spending. To do so would be to ignore the strategy of the socialists - to prevent the populace from being aware of how much they pay for government. Their tools are withholding taxes (you simply get used to your net pay - there is no uproar at tax time due to tax liability - many people even like tax day because they think they're getting refunds!). Another useful socialist tool is business taxes. Business taxes are just another way to hide one's tax liability. In the case of business taxes, the taxes result in higher prices, lower wages, or reduced ROI - all of which add to the individual's tax burden. But in no instance is a business tax paid by a business - always by individuals.
I agree tha spending cuts would be great - anytime we can get them! In the last 87 years, how many meaningful spending cuts have we enjoyed?
Goverment still grows unbounded in the face of formidable opposition! Why so? Are you willing to concede that the method of taxation does indeed affect spending?
You're spot on. The collection system IS the problem. And the hell of it is, withholding could be done away with by administrative action.
But politicians (both parties) want to keep it like it is.
Here's a very scholarly paper on the origins of withholding. She goes into the concept and how it ties in with human psychology.
http://www.cato.org/pubs/journal/cj14n3-1.html