For years, I've marvelled at the 'brilliant' idea of a federal payroll withholding tax. Government getting it's take of your earnings before you even get a chance to have them; the concept of 'not missing' what you don't have in the first place and the idea that people will 'get used to' looking at their take-home pay rather than how much 'disappears' to the government beforehand. Then, at tax filing time, actually rejoicing when you get a refund because you overpaid - as if the government is somehow giving you a gift rather than returning something taken from you.
For years, I've said that if every person had to actually write a check for their taxes, this nation would have seen a tax revolt years ago.
Now Rep. Bob Latta has introduced the Tax Education and Accountability Act (TEA Act), H.R. 5959, to eliminate the payroll withholding tax deduction from your paychecks and require individuals to pay those taxes on a quarterly basis, just like most small business owners and consultants have to do.
As Latta said in his press release:
“With this legislation, taxpayers will have a much better concept of exactly how much money Washington is taking from their paychecks. Armed with this knowledge, it is my sincere hope that more taxpayers become interested in knowing exactly what their taxes go towards and how severe the out of control spending is under the Obama Administration and the Democrat Congress. As our nation faces a record deficit of over $1 trillion for the second straight year and a $13 trillion debt that will hit $20 trillion by 2020, we are on a path towards fiscal disaster and the only way to stop it is for more people to be aware of what is happening right now with the taxes they send to Washington.”
And he's absolutely right. If people are required to write an actual check for the taxes, they will be much more aware of what they're actually paying and exactly how much of their earnings are going to the federal government.
But you can expect elitists to say that they can't rely on people to do this on their own which is why the government needs to do it for us. Of course, this attitude will only demonstrate how such elitists think they know what's good for us, perpetuating the nanny-state mentality that so many elitists seem to enjoy.
But individuals are capable of filing their tax forms by April 15th every year and paying any additional taxes owed, so why would paying quarterly be any different? If we can meet a filing obligation once a year, there's no reason to believe we can't meet a similar filing obligation four times a year.
Of course, these same elitists will claim that people won't save to pay their taxes on a quarterly basis. But that argument falls short for the same reason - if people can be expected to pay any additional taxes once a year, what would make those elitists think people wouldn't be able to meet this obligation four times a year?
Then there is the fact that nearly half the tax filers don't owe anything at all when they file on April 15th. But those same individuals who think they 'owe nothing' because they don't have to pay on April 15th would soon be 'educated' as to how much they really are paying if they actually had to write a quarterly check rather than have the government 'save' them the effort by deducting from their weekly paychecks.
The other argument that's sure to arise is that some people who are 'hurting' won't be able to save to pay their taxes on a quarterly basis - that their bills and needs are just too high for them to NOT spend everything they earn caring for themselves and their families. And I'll admit that there are probably some people who do not currently have the discipline to do this.
But relieving them of the responsibility does nothing to actually 'help' them. Instead, the current deduction process makes them more fiscally irresponsible by creating the expectation that they don't have to take care of these types of duties because the government is doing it for them. This is the same failed perspective that gave us Social Security - a mandatory government program that I cannot opt out of even if I can better prepare for my own retirement than the government can. (And this doesn't even mention that Social Security is going broke and probably won't have anything left by the time I retire anyway!)
Sadly, too many politicians, liberals and Democrats and some Republicans have such little faith in the American people to allow quarterly tax payments by all. I, on the other hand, have complete faith that the American people would 'rise to the occasion' and meet their financial obligations if they know what those obligations are and would actually have to suffer the consequences of non-compliance.
But that then raises a perspective you won't hear as any part of this discussion: the fear politicians would have should people actually know and understand just how much of their hard-earned money was going to the federal government.
Those who enjoy the privilege of expending those funds - often in frivolous and non-Constitutionally-mandated ways - realize that if people actually knew how much money the federal government was taking from them, they would not tolerate such ridiculous federal spending as Charlie Rangel's monument to me, $4.545 million for wood utilization research (which has cost taxpayers $95.3 million since 1985), or $50,000 for a National Mule and Packers Museum.
But you can't really miss something you've never actually had - so the politicians will continue to support the withholding tax because it allows us, the taxpayer, to conveniently overlook the amount of the money government is taking from us and makes us less likely to object to not only how the money is then spent, but also the overall amounts we're paying in the first place.
I applaud Rep. Latta for introducing this bill, which has been referred to committee. But I don't expect it to have much support from his fellow House members, nor from the public at large. Sometimes, it's just too easy to let the government be the nanny.