Friday, August 27, 2010

Letter to WSJ on AK Blanch Lincoln spending spree

Chicago Friday AM 27 August 2010

Editors, The Wall Street Journal


The Wall Street Journal Review and Outlook “Lincoln's Last Earmark” of Friday 27 August describes an abominable robbery of the federal treasury being attempted by a United States Senator. Unfortunately, as every reader knows, there are 90 other Senators perfectly capable of pulling the same flim-flam.

Certainly everyone cares about this sort of thing, but how much? The answer is found in The 2010 Statistical Abstract of the US which shows 62% of the total 2008 federal government receipts of $2.745 trillion 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. If the deductions do not get to the US general fund, the employer goes to jail, never the employee. Further insult is the legal requirement of a statement on the employee pay stub that if the employer were not being so taxed, they would give the money to the employee.

Since this is required of all employers, they can pass all of it on to customers in higher prices, resulting in the federal government being 2/3 funded by a silent national sales tax.

This anomaly can be easily corrected by 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, and also be required to include a note to the employee saying "here is how much the feds are expecting you to send in within 30 days"

Would this be inefficient? Certainly for an insatiable federal bureaucracy. But after a few months writing checks to the Government for 20% of their take-home pay, Senator Blanche Lincoln-like scammers would never be reelected.

Arnold H Nelson
5056 North Marine Drive Chicago IL 60640

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