Charles Murray had a great piece in the Wall Street Journal yesterday detailing the negative impact that payroll tax withholding has had on American liberty:
Payroll taxes are politically useful because low-income and middle-income taxpayers don’t complain about what they believe are contributions to their retirement and they think, wrongly, that they aren’t paying much for anything else. Tax withholding has a wonderfully anesthetizing effect on people whose only income is a paycheck, leaving many of them actually feeling grateful for their tax refund check every year, not noticing how much the government has taken from them.
But the politicians’ fear of being honest about taxes doesn’t change the urgent need to be honest. The average taxpayer is wrong if he believes the affluent aren’t paying their fair share—the top income earners carry an extraordinary proportion of the tax burden. High-income earners are wrong, too, about being exploited: Take account of payroll taxes, and low-income people also bear a heavy tax load.
End the payroll tax, end withholding, and these corrosive misapprehensions go away. We will once again be a democracy in which we’re all in it together, we all know that we’re all paying a share, and we are all aware how much that share is.
As I’ve said more than once, tax refunds are for suckers and tax withholding is perhaps the best thing that happened to those who desire to increase the size, scope, and power of the state. Get rid of both, and we’ll be a long way down the road toward restoring something resembling the Constitutional Republic this country was supposed to have been.
August 16th, 2009 at 9:46 am
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