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[Diana Duncan <dianaduncan AT contentdb.net>]

On Feb 23, 2005, at 12:20 PM, Greg Cox wrote:

> Flat rates shift the tax burden from the rich to the middle and the 
> poor.
I completely agree, which is why I didn't advocate a flat tax rate for 
wage income, just for "other" income.  I suppose that also would be a 
boon to trust-fund kiddies who derive their entire income from 
investments...I'm not at all sure what the numbers are there.  It 
would, of course, be nice for retirees for the same reason.  
Philosophically, I tend to think that money used for investments has 
already been taxed at income point.

> > 3) Enact a SIMPLE, progressive tax on wage income, where the first x
> > dollars are taxed at 0%, the next x dollars taxed at y%, the next at
> > z%, etc.  Require the payer of the wage to do all the
> > filing/withholding.
>
> We have that now.  You'd still want to file at the end of they year,
> though.  Say I work at HugeCorp, making HugeSalary.  They withhold
> taxes at a high rate that'll be correct if I'm there all year.  Then 
> they
> lay me off in July and I can't find work.  Suddenly, I've paid too much
> tax for what I made, and I want it back.  HugeCorp has no reason to go
> to bat for me; the government won't pay me back right then: they have
> no way of knowing I won't have a job tomorrow, same salary, and be
> back on pace for owing what I've paid in.
>
> Filing is a reconciliation and it's Not That Hard.  I don't get why
> it kicks so many peoples' asses.  The hard part is planning in advance,
> at hiring time, and mid-year, when you can do something about your
> liability for the year.
If there are NO deductions, NO exemptions, no joint filing, no nothing 
else, then the rate at which your employer withholds will actually be 
correct, which it isn't now - I've never found W-4's to be very 
accurate.  The only situation I can think of for reconciliation is if 
you hold more than one job, in which case the company(s) don't know how 
much you really make and may be withholding incorrectly.  I guess 
people who were paid mostly in cash (tip-earners) would have to file as 
well.  It would be the exception rather than the rule, though.

I don't think filing is that hard, but I do think it's a huge waste of 
time and money (and paper), both for the aggregate of individuals doing 
it and for the government.  Think of the money the government would 
save!

Thanks for the comments, I hope mine clarified what I was thinking.  
Remember, I didn't sleep last night. :)

Diana