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Bill allows taxpayers to pay taxes annually or use current system

With the 2011 tax season underway, Congresswoman Virginia Foxx has introduced legislation to give taxpayers different options for paying their federal taxes.  Her bill, the Federal Withholding Tax Repeal Act, does away with the federal mandate for withholding taxes from worker paychecks, allowing taxpayers to choose to pay their taxes once a year or to have taxes withheld in advance from each paycheck. 

“Tax withholding is a subtle way of disguising the true burden of federal taxes,” Foxx said.  “My bill does away with the withholding mandate to give taxpayers a choice in how they pay their taxes.  Some may wish to pay in one lump sum while others may wish to have their taxes withheld in advance.  Under this bill, taxpayers get a choice, not a federal decree.”

The federal government currently mandates that employers withhold a portion of workers’ paychecks and remit those tax payments to the government.  This system was created in the 1940’s, decades after the enactment of the federal income tax. 

Foxx’s bill (H.R. 918) makes this withholding system voluntary.  While it would not change taxpayers’ actual tax liability, it does give individual taxpayers flexibility in how they pay their tax bills: either in installments or as a single payment.  

“Withholding federal taxes from taxpayers’ paychecks is supposed to decrease the sting of paying taxes to Uncle Sam,” Foxx said.  “However, withholding is also a clever way of disguising the true cost of the federal government.  My bill seeks to not only give taxpayers new options and payment flexibility, but also to pull back the curtain on the full cost of federal taxes.  It’s about increasing transparency in government as well as convenience and choice for taxpayers."