Sunday, April 29, 2007

To John Derbyshire on withholding tax

Date: Sun, 29 Apr 2007 04:30:09 -0700 (PDT) From: "Arnold Nelson" Subject: John, before the VT disaster, you had some CornerPosts... To: "John Derbyshire"
...on the withholding tax. I hope you pickup on it again - it was great! When I was being still sitting on my mother's lap 72 years ago, I'm sure she was bellyaching about it. I think somewhere I'd seen the Milton Friedman angle, but thanks for reminding me - I had not heard the Rose part, but that was even better. I think this all started with the Social Security 'deduction' in 1935, and to this day, I don't think a single non-self-employed wage earner has ever written a check to the Feds to cover their 'share'. It's nothing but a tax on employers, the 'deduction' part is the biggest scam ever pulled. The big test is: if that employer's check doesn't show up at the Feds, the employer goes to jail, never the employee. Of course, when that check cleared, the money was immediately spent on current expenses, and some obscure bond was issued somewhere, saying: "Future US taxpayers promise to pay...." We have a talk show hostess here in Chicago, Teri O'Brien (temporarily off the air, unfortunately) a recovering attorney, who often points out there are two Supreme Court decisions from the late '30s that say the people who got the pay stubs have not a shred of claim on those bonds. I wonder, did Milton think up the original SSoc joke, or did he just discover how easy it would be to apply it to general taxes? Whatever, now we have the even more monstrous problem that the average NSE wage earner doesn't really give a damn about how high taxes go, since again, if that FedTax 'deduction' doesn't show up at the Federal Treasury, it's the employer who goes to jail, never the employee. The so-called taxpayer may jabber a lot about how 'that's his money', but even if he need not worry about going to jail if his 'contribution' doesn't make it to the Feds, he can get big trouble trying to write checks on his gross. So he has a strong inclination to vote for those who promise the hand-outs, and not the people who might suggest lowering taxes on the employers. And the employer? Just another expense - he could hire more people if it was lower, but there's just not enough of them voting. Then, just to prove every scam can be improved, there's the 'refund'.You can force your employer to pay even more than your 'share', and at the end of the year, we'll give it to you! This is even better than the fundamental precept of the banking industry: "You give us all of your money, and maybe we'll give you some back." That may be hyperbolic, but I worked for a bank for 13 years, and sometimes I got the feeling that was their ultimate, if unattainable, goal. I know you know all this, but it's so rarely discussed, it was refreshing to read your posts - I hope you can do it some more. Arn Nelson in Chicago