Unless I am mistaken, before federal income withholding was created, everyone paid their taxes for the previous year by tax day. Then when the atrocity of withholding was enacted, all of a sudden taxes are due upon receipt of paycheck and not on tax day. I can kind of understand how withholding makes things easier for both taxpayer and IRS, but why not give the taxpayer the option to pay the old way, all at once?

I have two main concerns with this. By never having posession of the money, the taxpayer is less aware of the amount than if they had to write a check every pay period.

Secondly, before withholding, the taxpayer could set aside and invest the money and then pay at the end of the year. The longer the taxpayer has the money, the more they could make. But withholding is in essence an instant interest free loan to the govt.

The govt knows that the taxpayer is being exploited because it doesn’t allow the individual to opt out of withholding if they wanted to.
A few of comments: First, why on earth would Congress change the law that detracts from the money they take from their constituents? That’s like asking them to reduce their salaries. It’s never going to happen.

Also, there is a big difference between seeing what was taken on your pay stub and writing a check each pay period. Since you never have the money in possession, you don’t miss it as much.

In addition, why does the IRS get interest on underpayments but the tax payer (whose money it really is) can’t? Congress obviously sees the value in the interest that could be made over the year. The deck is stacked against the citizen from the get go with no chance for recourse. Okay, a lot of people had trouble paying the full amount in April. Let them pay withholding, but also let those who don’t want withholding to opt out. It’s unfair to punish the responsible citizens who can manage their money because of the actions of the dumber ones.