Treasury can just decide on its own to stop withholding taxes?
This seems wrong, somehow. On the other hand, it seems so very, very right.
Claim: White House Can Block Effect of “Fiscal Cliff” Tax Increases.
Experts and lawmakers alike agree that Treasury Secretary Timothy Geithner has the power to adjust how much is withheld from paychecks for tax purposes — for all taxpayers or just for some.
Oh, well. Experts. Must be true, then.
By doing so, Geithner could ensure paychecks reflect the White House position that wealthier taxpayers with annual income higher than $250,000 see their taxes rise. Geithner at the same time could leave withholding tables where they are for the middle class, ensuring those workers don’t see a higher cut from their paychecks…
Meaning: even if tax rates go up, Treasury could simply not take the money directly out of our paychecks. Our withholdings would stay the same. But we would still owe the money at the end of the tax year, whether it was withheld or not, meaning:
The tactic could buy Washington precious time to strike a tax agreement without pinching the economy, but it carries substantial risk. If the administration miscalculates where rates end up, tinkering with withholding could morph tax refunds into hefty bills.
I dunno. Somehow I don’t see this administration being all that upset about higher middle class tax rates. As long as they’ve got the PR upper hand, which they do, they’ll just blame Republicans when those “hefty bills” come due.
That would be politically uncomfortable, especially as people would notice it in the spring of 2014, an election year. I suggest, instead, that we abolish withholding entirely so as to ensure that people appreciate just how much they’re paying.
Yes, let’s! I always thought that would take an act of Congress, but the “experts” say otherwise, so let’s go!
One more reason to elect a conservative next time!
On the other hand, though: if the Treasury Secretary can lower or stop withholdings altogether, could he also increase withholdings? I’m guessing not – it’d be one thing to take less than is owed, but another thing to take more money than is owed. Purposely, anyway.
And yet, if these “experts” are right, somebody’ll try it sooner or later. It’s an emergency! Republicans are trying to turn us into Greece! Hey, we’ll pay you back with a tax refund! Promise!