Enlighten the People

Enlighten the people, generally, and tyranny and

oppression of body and mind will vanish like spirits at

the dawn of day. …If a nation expects to be ignorant and

free- in a state of civilization, it expects what never

was and never will be.

-Thomas Jefferson

In a way, this U.S. Citizen believes those currently

in our government think they are the owners and

controllers of our bodies and what that body produces.

This is certainly evident when those in government

speak regarding taxes and costs. When you hear a

legislator who is against cutting taxes for ordinary

citizens or businesses, they often refer to this as a cost to

the government and that it will increase deficits. I would

say only those with the mentality that considers our

money as being their property in the first place would

refer to its loss of use to the government as a cost.

Someone of this mindset is not a servant of the people.

This has a built in assumption that all our money is

potentially theirs except what they deem acceptable for

us to keep. Federal income tax withholding goes one

step further down this path because the government does

indeed take what they want first and we get the

remainder in our net paycheck.

Here we are today; at a point where a tax cut to the

people that earn the money is viewed as a cost or a

negative action by the government. It may be a negative

to the government, but it is a positive to the freedom of

the people.

This U.S. Citizen has been trying to think of ways

which can help to open the eyes of the American people

as to the view of us by our government and how they run

our lives and businesses. This U.S. Citizen can think of

one way which will quickly encourage citizens to get

involved in their government’s oversight. It involves a

relatively simple action which will focus the attention

directly on the disconnect between our representatives

and the citizens who send them to Washington. What I

propose is to eliminate the withholding of our money for

federal income taxes from all the citizens’ paychecks.

Why would this help you may ask? Well let me just

say I have a bumper sticker on my vehicle which says

“FEDERAL INCOME TAX WITHHOLDING, A

TEMPORARY WARTIME MEASURE SINCE 1943.”

The withholding tax was sold to the public as a wartime

emergency and a national necessity, but like most

government programs, it just never ended. The

consequence of the withholding tax is that it took most

of the burden, the calculation of, the pain of, and in that,

the very understanding of how much each of us pay in

income taxes every year.

On several occasions I have seen many strange looks

on people’s faces when they read that statement on my

bumper sticker. They look very confused. I myself did

not really understand the withholding of federal taxes

and how it worked until I was a personal financial

advisor working with families regarding their saving

efforts and money management. I would say 95% of the

people I helped did not understand their taxes. Doing

federal taxes meant nothing much more to them than

putting numbers into a tax program and printing a return

to mail or dropping off boxes of paper and receipts to

their tax preparer in the hope they did not have to pay in

this year. As their advisor, my job was to try to help

them create a budget, track, and possibly improve their

monthly cash flows in their households. This meant

making it easier for them to pay bills, save for

retirement, and most important for those with kids or

newborns, to save for their future college education.

The first place I always looked for ways to improve

monthly cash flow for people was looking at their last

few years of tax returns. What I began to notice and was

a very consistent finding was about 95% of people had a

history of receiving relatively large refunds due to them

after filing their federal taxes every year. For single

people, I would say the average refund was around

$1,500 if I remember correctly and this was occurring in

years 1999-2005. But what struck me was the refund

most married people received and especially if they had

children. I would say the average was $3,000 or more

easily. My next step was to ask them what they would

normally do with their refund money. A few said they

saved it but the majority used it as fun money. They

would use it for vacation or just spend a large portion of

it. Most would use it for something they honestly told

me they did not really need but for something they

wanted and suddenly had the means to obtain. Human

nature took over and the ability to satisfy an immediate

want trumped better judgment. It happens to all of us!

After this discussion I would then tell them

something which gave me again those same confused

looks I get when people read my bumper sticker. I would

ask them this: “Do you know when you get such a large

tax refund such as this in fact what you have essentially

done is given the federal government an interest free

loan of your money over the past year? And if you had

that money on a monthly basis you could have earned

the interest by having it in a bank or saved it for your

other financial goals helping you reach them possibly a

little sooner?” Again I would receive a look which said

they now understood how they had been for all intents

and purposes, swindled out of the use of their money for

the past year. It was always a revelation to them.

They would ask me what to do about it and I would

then help them understand how to adjust their

withholdings with their employers. It really is very easy

and most people had no idea they could even do this or

how. This was a clear and very prevalent lack of

understanding of how our tax system currently works.

A U.S. Citizen should not be this disarmed of the

knowledge of how its government uses them as a

resource for government endeavors.

All you have to do

is fill out a W-4 form from the IRS website and give it to

your payroll department. By law they must make the

change immediately and your next paycheck will reflect

the difference, giving you the ability to use your money

now instead of waiting until filing taxes the following

year.

Now why did I go through this explanation?

Because it illustrates the disconnect the ordinary U.S.

citizen has with the amount of tax dollars they really pay

and how the government and Congress spends our

money. By withholding peoples taxes from their

paycheck before they ever see it, people do not feel the

pain of their tax bill. Our government has created a

system where our money is taken from us and most

Americans think of doing their taxes as a positive thing

for them because when they do file in the spring every

year, they get a big monetary payoff. A little bit of that

immediate gratification discussed earlier. We actually

feel good about getting ripped off by our government but

most do not even know they were swindled.

I admit it works and there are today only a small

percentage of the U.S. taxpayers who really understand

this. The proof is evident by asking anyone you know a

simple question. Ask them this: “How much did you pay

in federal income taxes last year?” Nine times out of ten

I bet the answer you receive will be along the lines of: “I

didn’t have to pay, I got money back!” This response

tells you there is no real understanding of what they pay

in taxes every year of their working lives.

Now to go back to my recommendation of

eliminating all the withholding for federal income taxes

from paychecks and what it would do. But first, just to

be understandable, I am not advocating here eliminating

income taxes, the IRS, or changing rates of any sort. I’m

simply talking about eliminating the withholding tax

from our paychecks in this particular instance.

Discussing rates and the income taxes overall is another

book altogether.

So what would it do? Yes, it would create some

problems for some but what it would do is create

tremendous focus on the government by the taxpaying

U.S. citizens. It would return to the citizen the

responsibility of tracking, budgeting for, and actually

paying the income tax bill. When the citizen must

actually write a very large check to the IRS in the spring

instead of getting back their no interest loan they gave to

the government, more citizens will take notice of how

much they pay in taxes. They will not be happy.

People would suddenly become very interested in

the spending done by our federal government because

they would actually feel the cost burden put on them by

their representatives and senators. When we live under a

system where the taxpayer does not understand their role

in paying for government and our representatives are

allowed to spend this tax money (ours) at will, our entire

system and country is in trouble. This type of system

breeds corruption. There is no accountability because

lawmakers are only accountable at elections by voters.

The American voter cannot hold them accountable

because the facts and understanding of the true costs

involved are obfuscated by government and a system

that keeps them in the dark.

My suggestion is to repeal the federal withholding

for income taxes for U.S. Citizens and watch as a

revolution of understanding emerges.

This U.S. Citizen