Today's Wall Street Journal ran an interesting article entitled, "Tax Withholding Is Bad For Democracy." The article was written by Charles Murray, a resident scholar at the American Enterprise Institute. Mr. Murray points out that withholding taxes does not give Americans the real picture of how much money they actually pay to the government.
He points out that 1% of American families paid 40% of America's personal taxes. He further points out that:
He points out that 1% of American families paid 40% of America's personal taxes. He further points out that:
"The families in the rest of the top 5% had family incomes of $160,000 to $410,000. They paid another 20% of total personal income taxes. Now we're up to three out of every five dollars in personal taxes paid by just five out of every 100 American families."Because the money is withheld, we don't really get a sense of how much money is involved. Mr. Murray also has some suggestions for combining payroll and social security taxes into general taxes withheld, since that is how Congress spends them. This would not add any additional expense and would end the idea that some naive people have that some of their taxes are actually being saved for their retirement. This idea is far too sensible for Congress to be willing to consider it!
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