Make Taxes Visible to Voters; 'Painless' Taxation Makes Big Government Possible
Byline: Michael Whalen , SPECIAL TO THE WASHINGTON TIMES
If conservatives regain power at the federal level, there is a single, revolutionary idea they should implement: the taxpayer savings account (TSA). A TSA would be established for every taxpayer, overseen by the government, into which future tax payments would be deposited. The TSA would be a substitute for the current withholding and quarterly estimated tax payment system.
The current withholding system distorts individual perception of tax liability. Your money is automatically whisked away from each paycheck to government coffers, and most folks receive their take-home pay. Then, when their final tax liability is computed, most Americans rejoice when they receive their tax refund, which is simply the excess of taxes they paid throughout the year. Of course, they can envision their tax liability from their return. But the psychological impact is distorted by the refund process.
Imagine a country where each taxpayer has a TSA. It could earn a modest return. The taxpayer could see that the TSA contains his money. Then, when his tax liability is computed, he would have to transfer the bulk of that money to the government instead of receiving a refund. The psychological emphasis would shift dramatically from what he gets back from the government to what the government costs him. …