Should we end having our taxes withdrawn from our check and just write a check every quarter for what we owe?

Question

The Federal withholding begin with the signing into law the "Current Tax Payment Act" of 1943. It was initially supposed to supplement our government's ability to fund our activities during World War II. It was at that time that your employer started deducting your Federal Income Tax from your paycheck. This was supposed to be a temporary, wartime effort. We see how temporary it has been.

How would people react if at the end of each year they got a bill that said they needed to send in $12987.72. That is what was withheld from my paychecks during the year of 2007.

We have grown so accustomed to the government just squirrelling our money away that we don't even notice it anymore.

Answer 1

WE FOUGHT THE ENGLISH NOT TO BE TAXED!

The problem is the American people have become wussies!

Tom Cryer just proved work isn't taxable. It's bartered for the money and there is no profit to tax!  The IRS went after hime for $72,000 in back taxes and LOST!

www.youtube.com/watch?v=6KjBy_qp4Zc&mo...

www.triallogs.com/index.php/content/vi...

Alaska "PAYS" and doesn't tax their residents!

www.earthrights.net/docs/oilrent   that’s oilrent

www.pfd.state.ak.us

We here in the lower 48 states are getting f^cked!

Our politicians all know what Alaska does and not one word ever about doing something better than taxes!

The Alaska state constitution claims common heritage rights of ownership of oil and other minerals for the people of the state as a whole. Citizen dividend checks are distributed every year in Alaska out of the interest payments to an oil royalties deposit account called the Alaska Permanent Fund (APF) created in 1976 after oil was discovered on the North Slope. The APF is a public trust fund - a diversified stock, bond and real estate portfolio - into which are deposited the oil royalties received from the corporations which extract the oil from the lands of Alaska. The first citizen dividend check from the interest of the APF was issued in 1982 and was for $1000 per every person for everyone in Alaska who had resided in the state for at least one year. Annual citizen dividends have been issued every year since then, for a total of more than $23,000 per person.

In 2003, each of the nearly 600,000 Alaska US citizens (residents of Alaska for at least one year) received a check for $1,107 from the APF. The total amount dispersed was $663.2 million. The $25 billion investment fund's core experienced stock market losses which led to the dividend's decline this past year compared to the several previous years. The amount was $433 less, a 28 percent drop from the 2002 pay out of $1,540, and a 44 percent decrease from the all-time high of $1,964 in year 2000. The amount changes based on a five-year average of APF investment income derived from the bonds, stock dividends, real estate and other investments.

Alaska relies on oil for about 80 percent of its revenue and has no sales or income tax. Alaska state government is mandated to invest 25% of its oil revenue into the APF while the other 75% of oil royalty revenue is dispersed to other government funds to finance education, infrastructure and social services. If 100% of Alaska's oil royalties had been deposited into the APF, it is conceivable that the CD this year could have been about $4,400 or $17,600 for a family of four. But then there would have been no funds for roads, education and other public services and no funds available to run the state legislature - a libertarian dream fulfillment or a social and economic disaster, which one we will never know. If state services were to have been maintained while 100% of oil royalties were deposited in the APF, there would of course have been the need for income, sales and other taxes on wages and production.

This country ran for 160 years on tariffs. It's a loophole free way to make all the foreign tax cheats pay what they owe.  Not skate our tax laws as they do now because they're based on profit!

Stop being such a wussie!!  Bully?  WUSSIE!!!

Answer 2

May as well.

It'd be a h**l of a lot easier than checking this box, adding it to this box, multiplying it by three and then computing it with an integer based on some asanine formula some jerk working for RAND corproation came up with a few years back...

I can write you a novel in a month but failed basic algebra.  No wonder the feds say that I owe an extra $300...

Taxes may be the entrance fee to a civilized society but quit jerking me around and just tell me what I owe!

Answer 3

The Govt needs the money during the year to pay its employees and other expenses..... in other words, the deduction from your paycheck enables the Govt employee to get his paycheck in time. I can't see any practical ideas to avoid tax deduction at source.

Answer 4

Sure

You go right ahead and give that a try.

See how it works for you.

Answer 5

No, we should not.  There is also an error in your statement.  Withholding did not start in 1943.  Withholding was a part of the Revenue Act of 1913.  In fact, withholding at the source for income taxes began with some of the first income tax laws in the U.S.  The first income tax law was passed in 1861.  The Bureau of Internal Revenue, which later became the Internal Revenue Service, was established in 1862.  Withholding of taxes from wages was started in 1862.

EDIT: Withholding requirements of the income tax law of 1913 can be found in Volume 38 of the U.S. Statutes at Large beginning on page 170.  You can read it at http://political-resources.com/taxes/cc/...

You can also read the Revenue Act of 1862 at http://memory.loc.gov/cgi-bin/ampage?col...

Turn to image 473 and begin reading at Sec. 91.  You can claim that withholding started in the 1940s, but you are most definitely wrong.

Quarterly payments of taxes by self-employed persons and quarterly payment of taxes collected by employers may have started in the 1940s.  I haven't researched that issue. However, withholding from pay by an employer has been a part of every income tax law passed since 1862.

Tom Cryer was acquitted of criminal willful failure to file charges.  However, an acquittal of criminal charges DOES NOT absolve him of the civil liability of his income taxes.  He still has to pay his back taxes, penalties and interest.  Also, an acquittal of income tax charges does not mean there isn't a law or that it's unconstitutional anymore than O.J. Simpson's acquittal means there isn't a law concerning the murder of your ex-wife.

Other claims from the movie, "Freedom to Fascism" are also frivolous, without merit, idiotic and just plain wrong.

http://evans-legal.com/dan/tpfaq.html

Answer 6

Personally I believe in the Fair Tax.  That is a tax on new merchandise.  No income tax, no social security, no regulatory fees, and no add on fees as materials move up the chain.  Put simply it works like this - if you buy a new house, never before occupied, you pay about a 30% sales tax.  If you buy a used home - no tax.  In our current system along the production chain payroll taxes and fees are added to the cost of the item.  Of course this will never move into law in my lifetime.  The IRS and Soc Sec administrations and all those tax lawyers and accountants will fight it.  They represent billions spent and don't want to find another line of work.  Just think of all the bureaucracy that could be eliminated.  A majority of the states have sales tax collection systems so there would be a very small learning curve to implement it.  Estimates are that this would actually increase spending and revenue and eliminate the impending bankruptcy of Soc Sec.  If you buy a used car or a new home at $150,000 you are paying less than the person who buys a $500,000 home and a new car every year. Each month every family gets a check - this helps low income as well as high income.  You can go to Fairtax.org for more info.  There are two books out about the Fair Tax.  Check it out.

Answer 7

I have income that isn't from a "job" so withholding isn't an option, and we do have to send in a check every quarter.  There is a penalty if we "underpay," so we usually overestimate what we send in the first 3 quarters, and work it out in the 4th.

Many people I know would spend the money if it were not withheld, and would also cry "unfair" at the end of the year when they got smacked for underpayment.  

To answer your question - Should we be able to do so?  Of course.  Should most people do so?  Probably not.

I wish we, as a nation, had the self discipline to pay our taxes without the government getting involved in our paychecks, but frankly, we are not generally that grown up.

Edit for Doc *L* You are right, there is the opportunity cost for us, and the risk associated with getting back "after inflation" return. However, we figure closely enough that we're never more than 3 to 5% over our required payment, which will protect us  if we missed something important without being a huge burden on us.  We never get anything back, so the inflation is not a big issue to us.

Answer 8

In spite of what "small" says, tax collection is basically a farce. It keep us thinking that we're getting something in return for some payment, but in reality the revenue collected is a mere drop in a very huge bucket of debt.

This country is in fiscal trouble and nary a hand-full of Americans  have even an iota of a clue...

As to your question, Karen Star correctly stated that if one underpays, one is charged a penalty. What she didn't say is that if one overpays (to avoid said penalty) the government gets a free, no-interest loan for the remainder of the year. Actually it's worse than 'no interest'. It's negative interest when you adjust for the inflation that government via the FED and the Treasury, create/cause.

I am self employed and my wife is employed by a large company. I have tried to convince her (we'll see this year if i was successful) that to allow gov't to "borrow" her money in the form of withholdings is a losing deal. I don't do the quarterly shuffle; I pay at the end of the year and include the penalty fine for not filing quarterly. Again, you must look at the percentage government is inflating the currency to realize that you actually come out ahead using my method.

Of course you MUST save money to be used for that purpose. Some banks allow an "Open CD" wherein you can deposit as much money as you like, as often as you like, but can only take money out a few times per year. The interest, while not pegged to *real* inflation, is better than you'd get in a savings account, and better than you'd get in a coffee can or shoe box.

Sometimes I think about expatriating, but there's a new law (Google it) that says they can confiscate ALL of your wealth if you leave like that and if you just live overseas you still have to pay income taxes on your income earned there plus any from whatever sources here. AND they're planning to begin taxing "tax free" municipal bonds  now too.

Answer 9

You couldn't be more right.  Just look at the answers to this question.   Some justify it: The government needs it!  (how did the government work before 1943?)  And it was in the 40's that "withholding at the source" began.  The income tax when first approved was as you suggest: you would send in the money at the end of the year.  Sometimes in quarterly installments.

The economist Milton Friedman was working for the government in the '40's and always regretted the withholding plan.  (it was a wartime necessity)  He said without it, people wouldn't stand for the government taking so much of our money and squandering it.

I think you're right, they should require people to send in their tax money.  There are too many people who think they don't really pay taxes, they think the government gives them money at the end of the year, or that somehow the deduction "doesn't count" somehow.

Answer 10

how many of us would actually write that check?  if you have it in your hand you spend it.  we would all be in jail.  its a dumb idea.