"If you want to make enemies, try to change something."
-- Woodrow Wilson
What I'd really like to see is either a flat tax or VAT, but fat chance
anything will change, so I'll just offer an observation:
Whenever I don't pay estimated tax,I get penalized. Now let's follow that
through: by keeping money invested for as long as 15 months until April 15,
I am earning myself (and thus the IRS) extra taxable interest. How does the
IRS thank me for this remunerative largesse? By stiffing me with a penalty.
Am I correct in assuming the IRS doesn't want the extra money I'm generating
by holding off paying what I owe until April 15?
While politicians are not noted for their intelligence, I think even you can
see this is stupid; why not make withholding voluntary and allow those
taxpayers who are able, to pay what they owe in one lump sum each year? You
could even bring back a Federal version of the "Christmas Club" that banks
used to offer years ago. A taxpayer could "lock up" money owed to the IRS
in a taxable interest-bearing account that couldn't be touched until a few
days before April 15. That way the IRS could be certain the taxpayer wasn't
just putting the money into short-term nontaxable investments while waiting
until April 15.
I'll admit most people wouldn't have the financial fortitude to put away
money that used to go to withholding into such a "tax account", so maybe it
could be mandatory, with the taxpayer choosing whatever short-term taxable
vehicle from an IRS-approved list.