Monday, July 16, 2012

Explaining fed taxes to to Ramesh Pourru/NationalReview Mag, taxes

To: "Ramesh Ponnuru" National Review magazine Saturday, July 14, 2012 2:34 PM

Ramesh, in your reply to a letter in the 11 June Issue of  National Review Magazine, you write: "Most people with no federal income-tax liability pay payroll taxes...."

Ramesh, you are a smart commentator and very readable writer, but you must know that the 90% of voters are wage earners and do not pay "payroll taxes" - they are paid with checks from employers' bank accounts, not voters' bank accounts.  If the money doesn't get to DC, the employer goes to jail, never the employee. This started w/ social security withholding in 1937, greatly expanded with the Current Tax Payment act of 1943 (income tax w/holding).   According to the 2012 Statistical Abstract, 73% of ALL taxes received by the federal Gov come from employers' bank accounts, not voters' bank accounts.

Compounding the problem, the employee gets a regular written statement from the employer, to the effect of "We must send this money to the government, but if we didn't, we would give it to you."  How many times have you seen the statement:  "I Paid in!  I deserve SocSec, and Medicare!?"

Further problem:  Since this is  cost of doing business, employers add it to the cost of their product, thus converting alleged taxes on wage earners to a silent, effectively painless, national sales tax.

Is there a way to fix this scam? Sure: Get a majority of the House of reps, 60 Senators, and a President with backbone enough to change the US Tax code 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, including a note to the employee: "Here is what the feds are expecting you personally to remit in 30 days"

Ten per cent of voters are self-employed, and do send in money. Returning to 90% of voters the responsibility of writing monthly checks to fund the government would force them to face how much all these entitlements cost, encouraging voting for legislators less likely to support federal vote-buying giveaways. What would employers do with all that money they are sending in now? Hire more workers? Goodbye recession!"

Arnold H Nelson

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