6 ms·

This is actually how things were done pre WW2. If people were able to budget for it then, why not now? The current system makes filing taxes and getting refunde

This is actually how things were done pre WW2. If people were able to budget for it then, why not now? The current system makes filing taxes and getting refunded seem like a reward, it should probably be a bit painful to do your taxes. Without the painful transparency, it becomes too easy for the government to nearly invisibly turn up the tax rate on individuals to pay for whatever boondoggle or foreign war they see fit.

adjkant 8y ago
> If people were able to budget for it then, why not now? A failing public education system and increasingly consumerist culture that encourages bad spending habits using psychological advertising tricks, to start. Go look at how little savings Americans have currently as well, which has been covered ad nauseam by most news outlets in the past few years. > Without the painful transparency, it becomes too easy for the government to nearly invisibly turn up the tax rate on individuals to pay for whatever boondoggle or foreign war they see fit. Given that it directly affects take-home pay, any significant change is pretty noticeable. Heck, even Trump's very small changes for the middle class were noticed on paychecks slightly, though there was also an unequal decrease in witholding that made people's refunds smaller.
- rplst8 8y ago
  > A failing public education system and increasingly consumerist culture that encourages bad spending habits using psychological advertising tricks, to start. Go look at how little savings Americans have currently as well, which has been covered ad nauseam by most news outlets in the past few years. While these may play a small part in why people couldn't budget for it now, I think a bigger part of it is that income tax just did not apply to most people in as large of sums that it does today. For example. The lowest tax bracket in 1940 was 4% and went from $0-4000. Median income at that time in the US was about $950.
  - mauricio 8y ago
    Using the tax brackets to measure how much we pay in taxes is incorrect. There are things like Earned Income Credit and other credits that generally relieve the tax burden completely from lower income earners. Check out https://taxfoundation.org/summary-federal-income-tax-data-2017/ https://taxfoundation.org/summary-federal-income-tax-data-20... for an analysis on 2015 US taxes. The bottom 50% of the US paid an average of 3.59% of their income. MarketWatch claims that 44.4% of Americans pay no federal income tax at all: https://www.marketwatch.com/story/81-million-americans-wont-pay-any-federal-income-taxes-this-year-heres-why-2018-04-16 https://www.marketwatch.com/story/81-million-americans-wont-...
- projektfu 8y ago
  Far fewer people were subject to the income tax at the time. The average Joe who couldn't read well or do much arithmetic didn't have to worry about it. For this reason the Social Security tax was implemented as a payroll tax. The tax was intended primarily as a tax on the wealthy or middle class, but over time by not adjusting the standard deduction/exemptions, more and more people ended up paying the tax. You could also make the argument that more and more people became middle class.
tdeck 8y ago
Income taxes in the US applied to a much smaller segment of the population before WW II than they do today.
- brandonmenc 8y ago
  A situation worth getting back to, imo.
  - ljf 8y ago
    Which taxes (if any) would you prefer?
    - rplst8 8y ago
      The point isn't so much that people are taxed. It's that they are taxed by a monolithic out-of-control bureaucracy that has grown much to large for anyone's good. To add to this, I'd be 100% ok if my tax bill was flipped such that the federal government got what my local government had gotten and my local government got what the federal government had gotten.
      - GcVmvNhBsU 8y ago
        I’m curious as to how you think your proposed structure would be significantly different from the structure under the Articles of Confederation. It seems as though we’ve already tried having minimal revenue raising structures for the federal government, learned that such a structure does not work well at international scales (240 years ago - we’re even more globalized now) and moved onto a more productive form of taxation.
        rplst8 8y ago
        The things we are spending money on (besides arguably defense) have next to nothing to do with working at international scale. Furthermore, while I'm not advocating we return to the era of AoC, the power granted via the current Constitution does not bestow the power, size, and scope of things that the current federal government has embraced.
benj111 8y ago
"becomes too easy for the government to nearly invisibly turn up the tax rate" Or not. Source. I live in a country where the vast majority have income taxes handled by their employer. It would still be front page news if income tax rates increased or decreased. Painful transparency is just pain.
- dsfyu404ed 8y ago
  It would be front page news for a day then people would forget and you'd never hear about it again. Do it in the US and it's front page news on the day and then it's on the second and third pages January through April the following year.
  - kurtisc 8y ago
    That's not my experience. The UK has automatic taxation but the current government lowered effective tax for most people this month and parties make tax-rate pledges during election campaigns.
  - benj111 8y ago
    That doesn't really disagree with what I said. How many days is it reasonable for something to be front page news? Personally I'd prefer 365 different headlines then the same one for 4 months straight.
- conanbatt 8y ago
  How much are income taxes in your country compared to the US?
  - benj111 8y ago
    Its UK, so between 20% and 45%.
jumbopapa 8y ago
It's actually a little ironic who introduced the idea of tax withholding. It was Milton Friedman and little did he know that federal tax withholding would allow the government to grow larger than ever imagined.
AlexandrB 8y ago
> Without the painful transparency, it becomes too easy for the government to nearly invisibly turn up the tax rate on individuals to pay for whatever boondoggle or foreign war they see fit. This narrative is based on nothing. The overall tax rate has been basically flat bouncing between 15% and 20% since WWII[1]. [1] https://en.wikipedia.org/wiki/Income_tax_in_the_United_States https://en.wikipedia.org/wiki/Income_tax_in_the_United_State...
davemp 8y ago
> Without the painful transparency, it becomes too easy for the government to nearly invisibly turn up the tax rate on individuals to pay for whatever boondoggle or foreign war they see fit. Non-sequitur. Taxes are already seen on every pay stub and tax return. Even if taxes weren't explicitly state, simply having less money is painfully transparent.
- conanbatt 8y ago
  If thats your argument, then you must agree to do away with witholding, there is no downside to the rational actor.
  - davemp 8y ago
    Reality is a bit more complex than that. But if I were to design a tax system, it likely wouldn't have withholding. I'd probably mess around with some weird purely transactional/continuous tax system though.

adjkant 8y ago

> If people were able to budget for it then, why not now? A failing public education system and increasingly consumerist culture that encourages bad spending habits using psychological advertising tricks, to start. Go look at how little savings Americans have currently as well, which has been covered ad nauseam by most news outlets in the past few years. > Without the painful transparency, it becomes too easy for the government to nearly invisibly turn up the tax rate on individuals to pay for whatever boondoggle or foreign war they see fit. Given that it directly affects take-home pay, any significant change is pretty noticeable. Heck, even Trump's very small changes for the middle class were noticed on paychecks slightly, though there was also an unequal decrease in witholding that made people's refunds smaller.

rplst8 8y ago
> A failing public education system and increasingly consumerist culture that encourages bad spending habits using psychological advertising tricks, to start. Go look at how little savings Americans have currently as well, which has been covered ad nauseam by most news outlets in the past few years. While these may play a small part in why people couldn't budget for it now, I think a bigger part of it is that income tax just did not apply to most people in as large of sums that it does today. For example. The lowest tax bracket in 1940 was 4% and went from $0-4000. Median income at that time in the US was about $950.
- mauricio 8y ago
  Using the tax brackets to measure how much we pay in taxes is incorrect. There are things like Earned Income Credit and other credits that generally relieve the tax burden completely from lower income earners. Check out https://taxfoundation.org/summary-federal-income-tax-data-2017/ https://taxfoundation.org/summary-federal-income-tax-data-20... for an analysis on 2015 US taxes. The bottom 50% of the US paid an average of 3.59% of their income. MarketWatch claims that 44.4% of Americans pay no federal income tax at all: https://www.marketwatch.com/story/81-million-americans-wont-pay-any-federal-income-taxes-this-year-heres-why-2018-04-16 https://www.marketwatch.com/story/81-million-americans-wont-...
projektfu 8y ago
Far fewer people were subject to the income tax at the time. The average Joe who couldn't read well or do much arithmetic didn't have to worry about it. For this reason the Social Security tax was implemented as a payroll tax. The tax was intended primarily as a tax on the wealthy or middle class, but over time by not adjusting the standard deduction/exemptions, more and more people ended up paying the tax. You could also make the argument that more and more people became middle class.

tdeck 8y ago

Income taxes in the US applied to a much smaller segment of the population before WW II than they do today.

brandonmenc 8y ago
A situation worth getting back to, imo.
- ljf 8y ago
  Which taxes (if any) would you prefer?
  - rplst8 8y ago
    The point isn't so much that people are taxed. It's that they are taxed by a monolithic out-of-control bureaucracy that has grown much to large for anyone's good. To add to this, I'd be 100% ok if my tax bill was flipped such that the federal government got what my local government had gotten and my local government got what the federal government had gotten.
    - GcVmvNhBsU 8y ago
      I’m curious as to how you think your proposed structure would be significantly different from the structure under the Articles of Confederation. It seems as though we’ve already tried having minimal revenue raising structures for the federal government, learned that such a structure does not work well at international scales (240 years ago - we’re even more globalized now) and moved onto a more productive form of taxation.
      - rplst8 8y ago
        The things we are spending money on (besides arguably defense) have next to nothing to do with working at international scale. Furthermore, while I'm not advocating we return to the era of AoC, the power granted via the current Constitution does not bestow the power, size, and scope of things that the current federal government has embraced.

benj111 8y ago

"becomes too easy for the government to nearly invisibly turn up the tax rate" Or not. Source. I live in a country where the vast majority have income taxes handled by their employer. It would still be front page news if income tax rates increased or decreased. Painful transparency is just pain.

dsfyu404ed 8y ago
It would be front page news for a day then people would forget and you'd never hear about it again. Do it in the US and it's front page news on the day and then it's on the second and third pages January through April the following year.
- kurtisc 8y ago
  That's not my experience. The UK has automatic taxation but the current government lowered effective tax for most people this month and parties make tax-rate pledges during election campaigns.
- benj111 8y ago
  That doesn't really disagree with what I said. How many days is it reasonable for something to be front page news? Personally I'd prefer 365 different headlines then the same one for 4 months straight.
conanbatt 8y ago
How much are income taxes in your country compared to the US?
- benj111 8y ago
  Its UK, so between 20% and 45%.

jumbopapa 8y ago

It's actually a little ironic who introduced the idea of tax withholding. It was Milton Friedman and little did he know that federal tax withholding would allow the government to grow larger than ever imagined.

AlexandrB 8y ago

> Without the painful transparency, it becomes too easy for the government to nearly invisibly turn up the tax rate on individuals to pay for whatever boondoggle or foreign war they see fit. This narrative is based on nothing. The overall tax rate has been basically flat bouncing between 15% and 20% since WWII[1]. [1] https://en.wikipedia.org/wiki/Income_tax_in_the_United_States https://en.wikipedia.org/wiki/Income_tax_in_the_United_State...

davemp 8y ago

> Without the painful transparency, it becomes too easy for the government to nearly invisibly turn up the tax rate on individuals to pay for whatever boondoggle or foreign war they see fit. Non-sequitur. Taxes are already seen on every pay stub and tax return. Even if taxes weren't explicitly state, simply having less money is painfully transparent.

conanbatt 8y ago
If thats your argument, then you must agree to do away with witholding, there is no downside to the rational actor.
- davemp 8y ago
  Reality is a bit more complex than that. But if I were to design a tax system, it likely wouldn't have withholding. I'd probably mess around with some weird purely transactional/continuous tax system though.