Happy "Withholding Tax" Day

Tyler Durden's picture

Via Jim Quinn of The Burning Platform blog,

On this day in 1943 the “Current Tax Payment Act”, was passed by Congress. It provides for income taxes on wages and salaries to be withheld by employers from paychecks. The purpose stated was that is was an emergency provision for the War. Sure — but it is still with us today. This act accounts for the uncontrolled growth of government more than any other event!!!

Also on this day in 1963 The Equal Pay Act, P.L. 88-38, is enacted. It guarantees women equal pay for equal work but proves difficult to enforce. “Equal work” is totally subjective but contributes to Lawyer’s full employment.

Milton Friedman, who was a key player in implementing the “tax withholding” system realized what he had done and sought redemption.

“Far more important, without a system of current collection, it would have been impossible to collect the amount of income taxes that we collected during the war. At the time, we concentrated single-mindedly on promoting the war effort. We gave next to no consideration to any longer-run consequences. It never occurred to me at the time that I was helping to develop machinery that would make possible a government that I would come to criticize severely as too large, too intrusive, too destructive of freedom. Yet, that is precisely what I was doing.”

Since defects don’t matter, according to Chaney and others, there is only one reason why the Government doesn’t just print Legal Tender rather than collecting taxes. That reason is to legitimize the $US as the worlds reserve currency.