

End Federal Withholding to Clarify What Government Takes
11 snips Apr 15, 2025
Join Adam Michel, Director of tax policy studies at the Cato Institute, as he uncovers the hidden costs of federal tax withholding. He argues that this policy obscures the true burden of taxation, making it harder for taxpayers to grasp their financial obligations. The discussion ventures into alternative tax structures like a negative income tax and a simplified flat tax, aiming to empower citizens with clearer fiscal responsibilities. Michel also contemplates how ending withholding could prompt demands for a leaner government and greater accountability.
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Income Tax Breakdown
- The income tax is progressive; higher earners pay a larger share.
- Lower earners pay little to no income tax, sometimes even receiving net benefits.
Tax System Advocacy
- Avoid universal basic income-style systems.
- Advocate for a low, flat tax rate with a standard deduction.
Withholding's Deception
- Federal withholding obscures the true amount of taxes paid.
- Tax refunds are simply the government returning over-collected taxes.