Arizonans who pay federal income tax spend 73 days on average working for Washington. Then, they spend another 20 to 40 hours filling out tax forms. Ahh, for the good old days.
Abraham Lincoln imposed the country’s first income tax in 1862 to finance the civil war. After the tax expired numerous attempts were made to reinstate it, all of which were rebuffed. In 1895 the U.S. Supreme Court found the income tax unconstitutional. This Court decision led to the Constitution’s Sixteenth Amendment, the legalization of government directly taking income, in 1913.
Until 1944 Americans paid taxes by writing one lump sum check and sending it to the government on March 15. Not surprisingly, this prompted citizen protests and kept politicians on a short spending leash.
The design of the “withholding tax” eliminated the government’s annual tax battle. By turning businesses into tax collectors and requiring them to take a bite out of every employee’s paycheck, Americans were no longer presented their entire tax bill at once. Consequently, many of us don’t realize the full amount we’re taxed.
In 2005, if your taxable income was $50,000, your one time tax payment would have been approximately $10,000. Eliminating withholding would once again put Americans face-to-face with the cost of big government. Which could lead to an overdue tax revolt with a capital R.
Noah Clarke is an economist with the Goldwater Institute Center for Economic Prosperity.