Come next April, more people will be writing a check to the IRS, according to a new report from the Government Accountability Office.
Good. This can be described in two ways — either that fewer people will have been making interest-free loans to the Feds, or that fewer people will have been sheltered from the full costs of government. But that isn’t quite how the news is being reported, of course.
Senior Democrats asked that a report be done on the withholding tables. Changes in tax law have, after all, meant that people will owe different amounts. That’s the point of having changed the tax laws, of course. The complaint, though, is that perhaps people won’t be having enough withheld, and thus will have to make it up with a check at tax settlement time. Or, as we might put it, 30 million more people are going to get sticker shock at what it costs to run the amount of government we already have. Which would put a damper on the usual Democratic plans for us to have more of that lovely government.
This is why we should undo the greatest of Milton Friedman’s mistakes. For it was indeed he (along with others, to be sure) who introduced this concept of withholding when working in government as a young man. Withholding makes it easier for government to collect taxes. It also makes it easier for us not to miss our money quite so much. A bite out of each paycheck is less painful than facing the full bill once a year.
And that’s why we should abolish withholding, to make all of us face the full costs of what is done to and for us as a single demand once a year, preferably 30 days before election time.
It is indeed just fine to want a more expansive government providing ever more to its beneficiaries. All advocates of big government have to do is convince everyone else that’s worth it — and without hiding the costs! It’s exactly because withholding makes it easier to pay for government that we should be doing away with it.
Now, of course, I support this idea just because I’m a small state minarchist who eats babies for breakfast. I’ve even been known to have a good word for the Koch brothers. Anything that makes it more difficult to collect the excessive taxes used to run the currently monstrous state is a good idea in my book. But why shouldn’t everyone agree with this, even proponents of big government?
Their argument is that we all agree government is worth it, and that what we pay over in taxes for the things we do together creates not just good value, but provides the very basis of a civilized life, of a life worth living. Therefore, persuading everyone to cough up their taxes should be no great difficulty.
Good. Then let’s abolish tax withholding, and find out exactly how much government we’re all really willing to pay for. I would bet that it’s less than what we already pay, but those who believe otherwise should have the confidence of their beliefs, right?
Tim Worstall (@worstall) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a senior fellow at the Adam Smith Institute. You can read all his pieces at The Continental Telegraph.
