The Lighter Side of Income Taxes

Send Me The Bill! An Idea About Taxes

According to the tax foundation tax freedom day for the year 2007 was April 30. That means we work until then just to pay our tax bill; federal, state, and local. Clearly, reforms are needed and the current strategies promise little in the way of real fundamental reform. I think awareness is the key. No one would tolerate a phone bill freedom day in the month of February much less May! We do so I maintain because our tax bill is invisible. It will be painful at first but I think its time for us to face our fears and pay our bills.

My proposal is simple. Eliminate income withholding altogether. What you earn is what you bring home. In its place I propose that the federal government send each and every taxpayer a bill, either yearly or monthly. The bill should be itemized showing all the expenses that we are incurring as citizens of this country. Our portion of the bill will be clearly marked for each expense and a total bill will be issued. Paying taxes under this system would be no different than paying your telephone bill, or rent, or utilities, or car payment, or whatever.

The greatest advantage of this system is that it makes taxes a visible phenomenon. No more uncertainty about where our money is going and what our part of the bill is. Everything is out in the open because everything is itemized. This will instantly make government much more accountable to the taxpayers (or voters if you prefer). No one hesitates to call the phone company if they want to dispute the accuracy or legitimacy of their bill. So that same accountability will be in place for government as well. It will be much easier to eliminate waste if everyone can see it in writing. Cost conscious consumers will not tolerate some of the expenses that we now ignore because they will no longer be ignored.

A possible flaw in this proposal is the taxpayers’ ability to pay the bill. The argument goes something like this: We have to withhold taxes from people’s pay otherwise they would just spend the money on something else and we would never collect any revenue.

There are two responses to this. First, it seems very demeaning to assume that ordinary citizens lack the ability to pay their bills. Most people are capable of paying their phone bill, their rent, their car payment. Why not their tax bill? To keep expenses lower, or to make the bill more manageable, we can issue bills on a monthly basis. I believe people will quickly learn to plan for this expense. Secondly, if the bill is in fact too high for the average taxpayer this should tell us something significant in and of itself.

Government consumes too much of our GNP as it is and sending taxpayers a bill would probably enhance this already inchoate realization. So much the better. If everyone can feel what it means to say that we pay too much in taxes then reform cannot be far off. As it stands now, the proposition that taxes are too high is an abstraction; more so for those who get refund checks every year. The surplus tells us precisely that taxes are to high but its far more difficult to get Washington to give back money than to pay our bills as they come in. Our government is of the people, by the people, for the people. We the people can pay our own bills!