Tuesday, May 18, 2010

Letter to Washington Post: Robert Samuelson on Balancing the budget

Chicago Tuesday AM 18 May 2010

Editors, The Washington Post


The Washington Post's Robert Samuelson says in his Monday, May 17 “Wake up, America” column that “What Americans resolutely avoid is a realistic debate about the desirable role of government,” and that this “lack of seriousness is defined by three missing words: 'balance the budget.'” Mr. Samuelson further explains that “The virtue of balancing the budget is that it forces people to weigh the benefits of government against the costs.”

The reason this virtue is resolutely ignored by voters can be found in the 2010 Statistical Abstract of US, table #468, page 311 that shows in 2008, the federal government took in a total of $2.745 trillion, 62% of which was withheld from wages. So nearly 2/3 of all the actual dollars that came into the US general fund were from employer bank accounts, not employee's .

Employers pass all of this on to customers in higher prices, resulting in almost 2/3 of federal income coming from an invisible national sales tax. This hoax has been going on since the Current Tax Payment Act of 1943, but because of a regularly expanding national economy, it's all but painless to voters.

There is a solution: Changing paragraph 3402 of USC Title 26 — 'Internal Revenue Code' Subtitle C 'Employment taxes' Chapter 24 'Collection Of Income Tax At Source On Wages'... from "every employer making payment of wages shall deduct and withhold upon such wages a tax..." to "every employer making payment of wages shall pay all of those wages to the employee...." The employer would still calculate the tax, replacing the reassuring (but thoroly misleading) note "you earned and your employer paid" with "here is how much the feds are expecting you personally to send in within 30 days"

Would this be inefficient? Certainly for an insatiable federal bureaucracy. But I think after a few months of writing checks on their personal bank accounts to the Federal Government for 20% of their take-home pay Americans will resolutely join the debate on the desirable role of government with a realistic vote on election day.

Arnold H Nelson

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