A small step on the road to restoration of independence?

In a piece Glenn linked titled "Big government on the brink," Robert Samuelson points out that Americans are more dependent on the government than they realize:

Few Americans realize the extent of their dependency. The Census Bureau reports that in 2009 almost half (46.2 percent) of the 300 million Americans received at least one federal benefit: 46.5 million, Social Security; 42.6 million, Medicare; 42.4 million, Medicaid; 36.1 million, food stamps; 3.2 million, veterans' benefits; 12.4 million, housing subsidies. The census list doesn't include tax breaks. Counting those, perhaps three-quarters or more of Americans receive some sizable government benefit. For example, about 22 percent of taxpayers benefit from the home mortgage interest deduction and 43 percent from the preferential treatment of employer-provided health insurance, says the nonpartisan Tax Policy Center.

Fortunately, because many people subscribe to the fiction that they have "paid in" to Social Security and are "getting it back," many Social Security recipients tend not to see themselves as tax eaters. But they're all in the same corrupt pot. We are nearing the point where the government giveth and the government taketh away -- everything we have.

I'm fascinated by the idea that Samuelson would even propose including "tax breaks" within the rubric of government largesse, because a tax deduction does not give anyone anything; it merely allows him to keep more of what he earned. 

OTOH, perhaps the idea is to make as many people as possible feel indebted to the government, and in that regard, whatever people are allowed to keep may come to feel like government generosity to hard-pressed taxpayers. Especially to conventional wage-earners whose taxes are withheld from their paycheck. What I have long thought would do much to restore the American spirit of independence would be to eliminate tax withholding altogether. Let employers pay people whatever they earned, and leave the duty to them to have to write a check in the proper amount to the IRS on April 15 of every year. They would be a lot more concerned about where their tax dollars are going, and it would lead to change. As things are now, vast hordes of pathetic dupes don't think they're paying taxes at all, and most of them see the refund of what they overpaid as a gift from the government!

Even the Treasury Department makes this damning admission about tax withholding:

This greatly eased the collection of the tax for both the taxpayer and the Bureau of Internal Revenue. However, it also greatly reduced the taxpayer's awareness of the amount of tax being collected, i.e. it reduced the transparency of the tax, which made it easier to raise taxes in the future.[2]

I find it maddening that people can be that stupid. But it's evidence that they are. 

Samuelson concludes,

All the partisan skirmishing over who gets credit for averting a shutdown misses the larger issue: whether we can restore government as an instrument of progress or whether it remains -- as it is now -- a threat.

It isn't the country that's the problem, it's the government.

It might still be possible to correct the problem at least in part, which is why I like the Tea Party approach, and see it as the next best thing to what would happen if Congress were to repeal tax withholding by employers. (Yes they can.)

Call it the Taxation Transparency And Individual Responsibility Act. I'd love to see someone run for office with a pledge to introduce such bill, because no one in Congress today has the balls to do it.

I hate to say this because it will sound elitist, but I have long been able to spot a difference in attitudes between guys who work in the construction trades (this probably applies to other occupations and professions) who are self employed and those who are employed by others. The guys who get a regular paycheck from some company (especially those who are working for the government) are usually in far less of a hurry to get to work, more likely to look for an excuse not to work, while the self employed tradesmen do not waste time. I have seen it when I have hired and worked with people, and I can even see it in the way they drive. Obviously, this is another generalization, and it does not apply to everyone. Just as there are many industrious employees there are no doubt many slothful self employed contractors. The difference is that the latter tend not to make it. Those who have what is called "job security" are simply not as motivated as those who do not.

Perhaps if they were actually given all the money they earn and told their taxes were now their own responsibility, they would behave differently.

Either that or they'd start a revolution on April 15.  

UPDATE: Well I'll be damned. I take back what I said about no one in Congress having balls. Rep. Virginia Foxx has introduced H.R. 918 -- the Federal Withholding Tax Repeal Act of 2011


The purposes of this Act are--

(1) to increase transparency and accountability in the Federal tax system by providing the public with a more accurate account of--

(A) the annual tax burden; and

(B) the Federal budget deficit;

(2) to decrease the overall tax burden and increase the personal wealth of taxpayers by allowing for the personal collection of interest during the fiscal year on overpayments that are otherwise used by the Federal Government to partly avoid interest payments;

(3) to decrease the burden on employers by freeing them from the task of collecting income tax withholding from their employees; and

(4) to end the deceptive practice of masking higher tax rates from taxpayers.


(a) In General- The following provisions of the Internal Revenue Code of 1986 are hereby repealed:

(1) Section 3102 (relating to deduction of social security tax from wages).

(2) Section 3202 (relating to deduction of railroad retirement tax from compensation).

(3) Chapter 24 (relating to income tax withholding).


Again, wow. That is the sort of thing that might be able to save the American spirit of independence.

Imagine if the bill were ever to become better known and started to pick up genuine support. It would put the left in the embarrassing position of having to admit publicly that they think working people are inherently incapable of taking care of themselves and managing their own financial affairs. 

The neatest thing about the bill is that it is so short. Instead of the usual thousands of pages, it is a mere 1,127 words -- which means that every member of Congress can actually read it, most in less than five minutes!

I'd like to see them pass it without any further delay. We may not be able to fully regain our lost independence, but H.R. 918 is a good first step.

posted by Eric on 04.11.11 at 05:30 PM


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