110 HR 3601 IH: Cost of Government Awareness Act of
U.S. House of Representatives
2007-09-19
text/xml
EN
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1.This Act may be cited as the
Cost of Government Awareness Act of
2007
.
2.
(a)The
Congress finds the following:
(1)Withholding of
income taxes originally was imposed as a means of meeting financial burdens
created by World War II; the Treasury Department believed taking tax payments
directly from workers’ paychecks would make it easier to fund government
without objection from taxpayers.
(2)Income tax
liabilities have increased exponentially since the imposition of withholding of
income taxes. Withholding taxes now represent a very substantial portion of
working taxpayers’ paychecks.
(3)Withholding of
income taxes is inherently deceptive, because taxpayers often are not aware of
the total amount of Federal taxes they pay or what percentage of their income
they pay in Federal taxes. Thus, withholding taxes hide the true cost of
government from taxpayers, making tax increases more feasible.
(4)Many taxpayers
overpay their Federal income taxes every year through withholding taxes. The
tax refund they receive is their own money, presumptively taken by the Federal
Government. Because taxpayers receive no interest on overpaid withholding
taxes, the Federal Government benefits from an interest-free loan of taxpayer
funds. Taxpayers would be far better served by saving or investing such
money.
(5)Withholding taxes
impose an unfair burden on American employers, who incur tremendous costs
complying with the Federal withholding scheme. Private employers should not
have to act as agents of the Federal Government by determining and collecting
income tax liabilities of their individual employees.
(6)Withholding of
income taxes effectively creates an unfair tax on amounts withheld. According
to the Internal Revenue Service, the term wages excludes collected
taxes within its definition. Yet the Service does not follow its own rule when
it collects withholding taxes on a taxpayer’s total paycheck.
(b)The
purpose of this Act is to restore to taxpayers an awareness of the cost of
government, by abolishing the withholding of income taxes.
3.Repeal of income
tax withholding
(a)Chapter 24 of the Internal Revenue Code of 1986 (relating
to withholding from wages) is amended by adding at the end the following new
section:
3407.No tax shall be imposed by this chapter on
any amount paid after December 31,
2007.
.
(b)The table of sections for such chapter 24 is amended by
adding at the end the following new item:
Sec. 3407.
Termination.
.
4.Monthly payments
of estimated taxes
(a)Subsection (c) of section 6654 of the Internal Revenue
Code of 1986 (relating to estimated income tax for individuals) is amended to
read as follows:
(c)Number of
required installments; due datesFor purposes of this
section—
(1)There shall be 12 required installments for each taxable
year, one for each calendar month.
(2)Time for payment
of installmentsThe due date for each required installment shall
be the 15th day of the following
month.
.
(b)
(1)Subparagraph (A) of
section 6654(d)(1) of such Code is amended by striking 25
percent
and inserting 8.25 percent
.
(2)Clause (ii) of
section 6654(d)(2)(C) of such Code is amended to read as follows:
(ii)The applicable percentage is—
(I)7.5 percent for
the 1st required installment, and
(II)for each
installment thereafter during the taxable year, the sum of 7.5 percentage
points and the applicable percentage for the prior
installment.
.
(3)Section 6654 of
such Code is amended by striking subsection (j) and by redesignating
subsections (k), (l), and (m) as subsections (j), (k), and (l),
respectively.
(c)The amendments made by this section shall apply to taxable
years beginning after December 31, 2007.