Posted on 08/02/2002 3:47:38 PM PDT by Tailgunner Joe
Americans are now in their 60th year of having income taxes withheld from their paychecks. And the National Taxpayers Union, no friend of the Internal Revenue Service, is condemning the law for having created a "bloated" welfare state that lacks accountability and punishes taxpayers.
"This withholding revolution represents the ultimate triumph of big government at the expense of the taxpayer," said Mark Schmidt, an activist with the National Taxpayers Union (NTU), who is urging Congress to change the way in which the government collects tax revenue.
"Thanks in no small part to this tax administration tool, the income tax has become a mass tax, the welfare state has become bloated, taxpayer rights have suffered, and the government has become less accountable for the burdens it imposes on society," said Schmidt.
Income tax withholding, which took effect in 1943, was part of Congress' effort to raise more money during World War II. Department store executive Beardsley Ruml suggested the idea of withholding after having discovered that his Macy's customers preferred to pay their bills over time in installments, even if the accrued interest increased their total bill. To sweeten the deal for taxpayers, Ruml threw in tax amnesty for the previous year.
At the time, liberal economist John Maynard Keynes and conservative economist Milton Friedman both supported the idea of withholding. But Friedman grew to regret it, and the practice has always stuck in the craw of some taxpayers and proponents of limited government.
Withholding is insidious, according to Schmidt, because people object less to incremental tax increases and, over time, have become accustomed to having hundreds of dollars taken out of each paycheck. The median two-earner American family paid $22,500 in income taxes in 1998, according to Heritage Foundation president Ed Fuelner, who believes that amount would cause taxpayers great anger were it not for withholding.
At the very least, Schmidt argues, Americans should receive interest on over-withheld taxes as a credit on W-2 forms. Schmidt calculates that deliberate over-withholding (whereby people get "refund" checks after filing their income tax statements every April), deprives the average worker of more than $100 in interest income annually.
More ambitious reforms could mean a repeal of withholding in favor of a monthly tax payment system, as proposed by Rep. Ron Paul (R-Tex.). Or the income tax code could be scrapped in favor of a flat tax, as House Majority Leader Dick Armey (R-Tex.) has proposed, or a national sales tax.
But any serious challenge to the entrenched withholding system would likely mean a big fight with groups who rely on the current system for their paychecks or policy goals.
Robert S. McIntyre, director of the liberal Citizens for Tax Justice, would be one such adversary.
"We need to collect the taxes. If they aren't withheld, a lot of people will cheat," said McIntyre. "That's what happens on the kinds of income that aren't withheld these days-small business profits and partnerships, [and] capital gains.
"Withholding makes it so that people can pay their taxes a little bit at a time, and it doesn't bother them as much," said McIntyre. "And even if it does bother them, they still pay them."
While some people might feel that tax withholding is unfair, McIntyre insists justice for taxpayers would be impossible without the current system. "The just thing is that the honest people don't get ripped off by those that aren't so honest," he said.
"We like law enforcement so that everyone doesn't shoplift. Taxes are like that. You can't count on everybody doing it voluntarily. We tried that in the Articles of Confederation, and it didn't last long. The states made voluntary contributions to the federal government" in theory but not in practice, McIntyre said.
The elimination of withholding would force the government to hire more federal law enforcers to deal with tax delinquents and government itself wouldn't be able to count on enough money coming in to pay for its many programs, said McIntyre.
"The Bush administration has lots of things it would like the government to do," he said. "They understand that eventually they have to be paid for. If you take a big whack out of the tax system for no apparent reason other than to cheer up some dishonest people, well then what do you do? Borrow the money?"
In the late 1940s, a Connecticut cable-grip maker named Vivien Kellems became so incensed about withholding that, for a time, she refused to do it for her 100 or so company employees. Years later, the Adolph Coors family launched its own short-lived resistance to withholding.
But tax withholding had already been debated for decades when it was signed into law in 1943.
The courts struck down efforts by Congress early in the 20th century to create a withholding system. Then in the 1916, in its Brushaber v. United States case, the Supreme Court ruled that withholding was a legitimate exercise of congressional power consistent with the 16th Amendment to the U.S. Constitution.
Despite the Supreme Court's blessing, another withholding provision became so unpopular that Congress repealed it in 1917, only to change its mind again in 1943.
But ya'll go ahead - keep on paying.
Bingo!
...And...would have to cut government...oh, my!
Note the sly attack: only dishonest people want the government to take away less in taxes. And Liberals wonder why they tend to annoy us honest people so much!
That would require some changes...
That would lead to some lynchings :)
Boonie Rat
MACV SOCOM, PhuBai/Hue '65-'66
Talk radio host Neal Boortz once pointed out that if the most productive members of society were to just take a year off or voluntarily reduce their income, they could devastate the budget of the Federal Government.
I wonder how far off we are from the "Atlas Shrugged" scenario?
"We need to collect the taxes. If they aren't withheld, a lot of people will cheat," said McIntyre.
A national retail sales tax (NRST) can't be cheated anymore than the current state sales taxes are cheated -- which is to say very little. McIntyre sounds like a typical self-serving bureaucrat.
Robert S. McIntyre, director of the liberal Citizens for Tax Justice, would be one such adversary.... The elimination of withholding would force the government to hire more federal law enforcers to deal with tax delinquents and government itself wouldn't be able to count on enough money coming in to pay for its many programs, said McIntyre.
With an NRST those problems would not exist. Yes, McIntyre is just like a politician or bureaucrat fabricating boogieman problems that need not exist.
If you take a big whack out of the tax system for no apparent reason other than to cheer up some dishonest people, well then what do you do? Borrow the money?
Well, the money is being extorted from people in the first place so allowing them to keep more of what is already theirs only makes for honest justice. And the government doesn't bower the money it cuts back if not eliminates some big government programs. Eventually to the point of the only thing government does is protect private property/individual rights.
It doesn't have to be voluntary. Productive members of society are being layed off everyday, and it's having a huge effect on local,state, federal budgets.
I could go on & on & on but why get more PO ed. Would you like to know a real kicker..
2 Two years ago my wife took a part time job for a short time with Head Start Cleaning up after the classes. For $5.00 hr. She finds out that Head Start PAYS The mothers $15 bucks to bring there little brats in ( and they are some of the most miss behaved kids) And has Donuts & coffee for them as they wait. ( I guess having 3 kids all different dads make it ok. /s )
I just love it when I come back from paying my property taxed and.. Well I did said I won’t go on & on.
But I know what you mean. Some time I would like to say the hell with it all too.
Robert McIntyre is a Communist pig. Any man in this country who believes, as he does, that the vast majority of Americans are dishonest, does not deserve to live in this country and breathe the same air the rest of us breathe!
His contention is that because we are liars and cheats, we need a Gestapo police force to enforce extortionary taxes!
Mr. McIntyre is wrong, dead wrong!
The vast majority of Americans are honest, and if each of us were treated by our government with equality under the law in respect of taxes (i.e., we were all taxed at the same rate), I am confident that the incidence of tax cheating would decline by one or two orders of magnitude.
Do you FReepers realize how poisionous McIntyre's brand of politics is to this country? He and his Communist brethren must be demonized to the point that no one will listen to their claptrap ever again.
The solution to the withholding problem is to replace the Liberal/Socialist/Marxist inspired "from each according to their ability to each according to their need" progressive income tax with a National Retail Sales Tax collected by the states and abolish the IRS!
Under a NRST, each person in America would be FRee to work, earn, save and invest as much money as he/she wanted to, without the heavy hand of government interferring with their individual FReely made economic decisions.
And, so would businesses, because under the NRST, there would be no tax on purchases made by businesses for raw materials and supplies used in the ordinary course of conducting business.
People like Robert McIntyre and his Communist brethren are the enemies of all people who value FReedom and Liberty, and we must ensure that every time he or one of his camp followers speaks, they are called out for their lies and distortions.
World History teaches us that every Communist/Socialist/Fascist politcal/economic scheme tried has been a monstrous failure, responsible for the loss of FReedom and Liberty (economic/political/social slavery and death!) for hundreds of millions of people throughout the world, and the progressive income tax and income tax withholding are part and parcel of the Communist/Socialist/Fascist state!
Please join with me to replace the income tax with a National Retail Sales Tax and abolish the IRS!
“I have sworn upon the altar of God eternal hostility against every form of tyranny over the mind of man.” [Thomas Jefferson, letter to Benjamin Rush, 1800.]
Scrap the Code! Scrap the IRS! Abolish the VLWC!
We will never be a truly FRee people so long as we have the income tax and the IRS.
Click here to help us scrap the Code, scrap the IRS and abolish the VLWC!
You can also click here to find out how to help us replace the income tax with a National Retail Sales Tax and abolish the IRS!
We will never be a truly FRee people so long as we have the income tax and the IRS.
Don't be too hard on Robby, he comes by his beliefs rationally. In his cloistered world, most Americans are are liberal or ultra-liberal, like him. Therefore, they are bound to be dishonest.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.