Chicago IL Wednesday, April 16, 2008
No one in American media comes close to the Wall Street Journal in delivering powerful editorials, but you beat even this high standard with your Tuesday, April 15, 2008 800 word "Loophole Factory"
After 700 words describing the absolute mayhem being committed by our federal legislature on their number one responsibility, taxes and spending, there is one loose end: "The losers are taxpayers who aren't powerful or rich enough to afford a tax lobbyist."
The problem here is that ever since the enactment of the Current Tax Payment Act of 1943, the number of taxpayers, people who write actual checks on their personal accounts to the federal government, has dwindled to considerably less than a critical mass.
Ninety percent of voters are wage earners, and ninety percent of US wage earners do not pay income taxes. They get a statement with every pay check saying they have paid federal income taxes, but the actual dollars in that transaction came from employers'
bank accounts, not wage earners'.
Employers are certainly not happy with this situation, but don't have the votes to change it, and are able to easily pass on the expense to customers. Also, as is so well described in your editorial, many employers are the same perps demanding, and getting, all those outlandish loopholes.
So 'income taxes' become a near-painless extraction of the fed's largest source of income from the soft underbelly of a continuously growing US economy. In 230 years we have moved from violently rebelling against "taxation without representation" to acceptance of "representation without taxation", without a whimper.
The solution to this problem is not the 'Fair tax', nor repealing the 16th amendment, just a majority vote in the House of Representatives and 60 votes in the Senate, to change 11, and add 24, words deep in the federal tax code, specifically:
Change paragraph 3402 of United States Code Title 26 — 'Internal Revenue Code' Subtitle C 'Employment taxes' Chapter 24 'Collection Of Income Tax At Source On Wages (a) Requirement of withholding (1) In general...' from:
"Except as otherwise provided in this section, every employer making payment of wages shall deduct and withhold upon such wages a tax determined in accordance with tables or
computational procedures prescribed by the Secretary[of the Treasury]."
To: "Regardless of what is provided in this section or anywhere else in US law, every employer making payment of wages shall pay all of those wages to the employee, and calculate upon such wages a tax determined in accordance with tables or computational
procedures prescribed by the Secretary[of the Treasury] and report the amount of that tax directly to the US Treasury and the employee."
Here would be a good place to add that the employee is expected to remit a personal check to the federal government for the amount of the tax before getting his next pay check.
Would this be inefficient? Sure, for an insatiable federal government, but educational for wage earner/voters, especially once they start writing checks on their own bank accounts to the feds for 20% of their last paycheck. This would result in direct responsibility for 80% of federal income being given back to those who are supposed to have it in the first place: US voters.
This could not be done over nite (as could not be done with the Fair tax either, but don't tell them.) So pick a random letter every month, and change all employees with last names beginning with that letter, to the new, real, pay-as-you-go system.
After the 26-month conversion period, every wage earner in the country would be writing a check to the feds for 20% of his pay every pay period. They would not be happy. That same period would include a re-election of all 435 members of the House and 1/3 of the Senate, that would reflect some of that voter unhappiness.
Employers could include an additional note with the pay check, suggesting the wage earner encourage their congressional candidates to bone up on Article I Section 8 of the US Constitution that lists all 18 things the congress is allowed to do, with a minor mention that the founders had no idea what future congresses would do with the 'general welfare' clause.
Unfortunately, a lot of citizens would be as outraged as the feds over this change. Rather than see it as their responsibility as citizens to have first hand experience with how much money the feds are playing with, they would want the present system to continue, where deep down, they like to feel they are getting something for nothing. Convincing them otherwise would be a major PR task, but better now then telling future generations why their nation is collapsing underneath them. 788 words
Arnold H. Nelson5056 North Marine Drive B-8 Chicago IL 60640773-677-3010 firstname.lastname@example.org