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I have often wondered why Republicans/Libertarians/other-tax-haters have never (as far as I know) made a serious effort to abolish the automated W2-style payche
by mdakin 17y ago
I have often wondered why Republicans/Libertarians/other-tax-haters have never (as far as I know) made a serious effort to abolish the automated W2-style paycheck withholding.
If everyone was required to write out checks to the IRS manually on a quarterly basis like self-employed people are I think larger scale tax reform would happen very quickly due to grass roots political pressure. Those quarterly checks really sting sometimes!
- grandalf 17y agoIronically, it was actually Milton Friedman who came up with the idea for automatic withholding. He later lamented this after he realized the impact it had on the growth of government. I think the initial idea may have come from the desire to enforce fairness, which is a great idea, but sadly it also led to tax increases being far easier to implement, as all the IRS needs to do is threaten to shut down a business if it doesn't make the proper withholdings. As it stands, enforcing withholdings is the primary way that tax money is collected and it's taken extremely seriously by the IRS. There are even massive penalties for paying withheld tax late (something like 25% interest).
- fatdog789 17y agoBecause they recognized that the most efficient way to collect taxes is by automatic withholding, which keeps the size of the IRS smaller than it would otherwise be. Our current system keeps the audit portion the same size as it would be in the non-automatic system, but cuts out most of the collection-side bulk (which would be HUGE in a manual system)..