Today there is an uproar among the political, punditry, and politics-geek classes. It’s about Republican Presidential Nominee Mitt Romney’s remarks about the 47% of Americans who don’t pay federal income taxes. As I understand it, Romney spoke off-handedly at a fundraiser some weeks ago about this slice of the American public as being overly dependent on the federal government and largely devoted to the re-election of President Barack Obama. Hence, the classes are in a tizzy. Some are tizzying for Romney, some are tizzying against him, and some are just plain tizzying.
I think it’s tizzy of a wrong type. I suggest we go straight to a more fundamental point about taxation. I suggest a change that would totally up-end how most Americans understand taxation on a day-to-day basis.
I call for the end of withholding.
The withholding of taxes from a person’s paycheck began during World War II. It was done in order to ease the flow of taxes from taxpayers to the government’s coffers. Less fuss, less hassle, less inefficiency.
But it’s also a very pernicious thing.
Withholding often means that people lose sight of the physical act of paying taxes. Looking at a pay stub and seeing the deduction is a far cry from paying the money out of your personal saving or checking accounts. It’s a comparatively painless and, I would argue, mindless, act. It dulls the awareness and consciousness of the reality of paying taxes.
The argument over which percentage of people does or doesn’t pay taxes is old. The argument over physically paying taxes would revolutionize the American citizenry’s understanding of the reality of taxation.