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Thursday, August 13, 2009

Tax Withholding Is Bad for Democracy

One of the most clever and sinister ideas every devised by a government bureaucrat is the concept of automatically withholding the payroll tax. With every paycheck the government involuntarily takes a portion of your money before it ever reaches your wallet.

From the government's perspective this is great. They get a steady stream of your money to spend and most people don't think about how much they're paying because it's incremental and semi-hidden. No doubt our national perspective on taxes and government spending would be quite different if every working person had to write a quarterly check to the government, just like tens of millions of self-employed people currently do.
So is the payroll tax. End them both and voters will have a healthier understanding of the government burden.

August 13, 2009
America is supposed to be a democracy in which we're all in it together. Part of that ethos, which has been so essential to the country in times of crisis, is a common understanding that we all pay a share of the costs. Taxes are an essential ingredient in the civic glue that binds us together.

Our democracy is corrupted when some voters think that they won't have to pay for the benefits their representatives offer them. It is corrupted when some voters see themselves as victims of exploitation by their fellow citizens.

By both standards, American democracy is in trouble. We have the worst of both worlds. The rhetoric of the president tells the public that the rich are not paying their fair share, undermining the common understanding from the bottom up. Meanwhile, the IRS recently released new numbers on who pays how much taxes, and those numbers tell the people at the top that they're being exploited. (more)

1 comment:

  1. It's amazing that we fall for this. I'm going to steal some of your money every week, and then make you fill out forms, and maybe even pay someone before you can get some of it back next year. Oh yeah, I'm not paying you interest either. You probably just got mad hearing that, yet millions of Americans are overjoyed when they get their refunds from the government. Amazing. Another bit of trickery is the illusion that a lot of people don't pay federal taxes. Did you use a telephone, pay for electricity, buy gas, god forbid smoke a cigarette, buy tires... then you paid federal taxes. People have simply forgotten that its their money, and the government should ask before taking it.