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Foxx introduces tax reform legislation
Washington, DC,
February 7, 2008
As tax season gets into full swing, Congresswoman Virginia Foxx has introduced tax reform legislation that repeals the law requiring employers to withhold federal taxes from their employees’ pay. The Federal Tax Withholding Act of 2008 (H
Contact: Aaron Groen Bill gives taxpayers freedom to forgo tax withholding As tax season gets into full swing, Congresswoman Virginia Foxx has introduced tax reform legislation that repeals the law requiring employers to withhold federal taxes from their employees’ pay. The Federal Tax Withholding Act of 2008 (H.R. 5175) will give working Americans freedom and flexibility in paying their taxes and will also help keep the federal government accountable to informed taxpayers. “It’s been more than six decades since the federal government forced employers to withhold taxes from taxpayers’ wages,” Rep. Foxx said. “The idea may have sounded great as a short-term wartime law in the 1940’s, but today it disguises the reach of the federal government into the pocketbooks of millions of Americans. We must end this practice and let the sunlight reveal the true burden of federal taxes.” Withholding was signed into law by President Roosevelt in 1943. Ostensibly a measure to help fund WWII, tax withholding became a mechanism that today allows the federal government to take ever-larger—but incremental—slices of workers’ paychecks without workers noticing the real cost of taxation. “It amounts to government slight-of-hand,” Foxx said. By repealing compulsory tax withholding, this legislation will allow taxpayers to invest the money normally pre-paid to the federal government, thus earning a return on cash that was withheld a year in advance. Donald Boudreaux and Andrew Morriss found in 1999 that federal tax withholding has cost taxpayers more than $400 billion in lost interest earnings since its enactment in 1943. “This bill puts the power back in average Americans’ hands,” Foxx said. “The federal government is in many cases taking more than it is due and then giving taxpayers a so-called refund? Why not let taxpayers keep the money in the first place? Most importantly, as Americans realize how much their government costs they will demand more accountability and much less waste.” The 362,000-member National Taxpayers Union also endorsed Rep. Foxx’s bill: “Through withholding, taxpayers are forced to make annual interest-free loans to the government and then wait for a refund until after the next filing season. This system is detrimental to taxpayers and shouldn’t be compulsory.” (See endorsement letter.) In a tribute to how harmful tax withholding is to Americans, the publication Human Events ranked federal income tax withholding as the fourth worst offender on its list of the Ten Most Harmful Government Programs and number seven on its list of the Ten Worst Tax Laws. For more information on H.R. 5175 please visit www.foxx.house.gov or contact Rep. Foxx’s office at (202) 225-2071. ### |