7 ms·

I suggest we stop taking taxes out of paychecks and have people pay their full taxes once a year. It would help them see the total amount of taxes they pay. I

I suggest we stop taking taxes out of paychecks and have people pay their full taxes once a year. It would help them see the total amount of taxes they pay. It would have a positive effect on government policy.

sunderw 7y ago
It used to be that way in France until last year. The income taxes are now substracted directly on your paycheck. I personnaly prefer having a small amout taken each month than an enormous sum as a one-time payment.
abustamam 7y ago
You can already see this on your pay stub (if you look at it, I know I don't bother with mine) In principle I like your suggestion but in actuality I think many Americans will not like their "yearly tax bill." Just think about people who are already living paycheck to paycheck; not saving much, or just overall spending every penny that comes into their bank account. They would be in trouble come April if they had to pay it at that point. Perhaps they could do a monthly installment payment for last year's taxes... And the taxpayer would auto pay once or twice a month when they get paid... But then, we're back to where we started. Tldr in an ideal world where every citizen is disciplined about not spending every penny they get, this suggestion would be great.
- HeWhoLurksLate 7y ago
  ...in an ideal world, they wouldn't have to spend every penny, either.
  - abustamam 7y ago
    I would argue in an ideal world money wouldn't exist but I think people have different ideals in that sense :) I know some people _have_ to spend every penny because they need to to survive, but there are also plenty of people who spend every penny because they just have no discipline and buy anything they want without regard to whether or not they could afford it. Ideally the people in the former category would get some sort of welfare. Not sure what, if anything, to do with the people in the latter.
- anticensor 7y ago
  You live paycheck to paycheck and still ineligible for income tax exemptions? Seems like a pretty USA-specific issue.
moftz 7y ago
You can set your withholding to nothing and end up with a fat bill every year. Financially, this makes sense. You could be making interest on the money you owe in taxes. However, not everyone is really able to be that disciplined or just financially need every dollar coming in. I think having both options, withholding and no withholding, is the best way.
- tedsanders 7y ago
  FYI, if you do this you will incur penalties. The United States requires payment quarterly. You cannot pay it all at the end of the year unless you want to pay penalties.
- nyczomg 7y ago
  This is bad advice for many people. Depending on your income you might be subject to penalties if you don't withhold or pay estimated taxes: https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes https://www.irs.gov/businesses/small-businesses-self-employe...
knz 7y ago
Can we do the same with health insurance premiums? The average cost of an employer plan is up to $20,000+/year in premiums alone but most people are oblivious to the true cost.
Sohcahtoa82 7y ago
Your idea is great for people who make good money and are able to set aside money into a savings account. But it doesn't work for low-income people that are already living paycheck-to-paycheck.

sunderw 7y ago

It used to be that way in France until last year. The income taxes are now substracted directly on your paycheck. I personnaly prefer having a small amout taken each month than an enormous sum as a one-time payment.

abustamam 7y ago

You can already see this on your pay stub (if you look at it, I know I don't bother with mine) In principle I like your suggestion but in actuality I think many Americans will not like their "yearly tax bill." Just think about people who are already living paycheck to paycheck; not saving much, or just overall spending every penny that comes into their bank account. They would be in trouble come April if they had to pay it at that point. Perhaps they could do a monthly installment payment for last year's taxes... And the taxpayer would auto pay once or twice a month when they get paid... But then, we're back to where we started. Tldr in an ideal world where every citizen is disciplined about not spending every penny they get, this suggestion would be great.

HeWhoLurksLate 7y ago
...in an ideal world, they wouldn't have to spend every penny, either.
- abustamam 7y ago
  I would argue in an ideal world money wouldn't exist but I think people have different ideals in that sense :) I know some people _have_ to spend every penny because they need to to survive, but there are also plenty of people who spend every penny because they just have no discipline and buy anything they want without regard to whether or not they could afford it. Ideally the people in the former category would get some sort of welfare. Not sure what, if anything, to do with the people in the latter.
anticensor 7y ago
You live paycheck to paycheck and still ineligible for income tax exemptions? Seems like a pretty USA-specific issue.

moftz 7y ago

You can set your withholding to nothing and end up with a fat bill every year. Financially, this makes sense. You could be making interest on the money you owe in taxes. However, not everyone is really able to be that disciplined or just financially need every dollar coming in. I think having both options, withholding and no withholding, is the best way.

tedsanders 7y ago
FYI, if you do this you will incur penalties. The United States requires payment quarterly. You cannot pay it all at the end of the year unless you want to pay penalties.
nyczomg 7y ago
This is bad advice for many people. Depending on your income you might be subject to penalties if you don't withhold or pay estimated taxes: https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes https://www.irs.gov/businesses/small-businesses-self-employe...

knz 7y ago

Can we do the same with health insurance premiums? The average cost of an employer plan is up to $20,000+/year in premiums alone but most people are oblivious to the true cost.

Sohcahtoa82 7y ago

Your idea is great for people who make good money and are able to set aside money into a savings account. But it doesn't work for low-income people that are already living paycheck-to-paycheck.