In its first hearing, the Subcommittee on Delivering on Government Efficiency (DOGE) revealed shocking findings of hundreds of billions of taxpayers’ dollars being wasted on improper payments and fraud. The revelations included $20 billion squandered at the Environmental Protection Agency, with EPA bosses knowingly wasting this massive sum.
As the tax deadline of April 15 approaches, taxpayers should be aware of a significant reason behind such colossal waste — the government receives their money before they do. This practice, as explained by economist Robert Higgs in "Crisis and Leviathan," emerged as a new development before World War II. Initially, individuals paid federal taxes on their income in quarterly installments during the following year. However, the wartime demands of a global conflict led to the introduction of new forms of taxation, including the withholding of taxes from workers’ paychecks.
Milton Friedman, an economist and one of the architects of this tax withholding system, later criticized the government for becoming too large and intrusive. Despite being initially implemented as a wartime measure, tax withholding remained in place, allowing the government to collect private resources to fund an expanded welfare state.
The welfare state, as highlighted by DOGE, has expanded into a wasteful state, with taxpayers feeling the burden of government inefficiency. Workers see a significant portion of their earnings withheld before they receive their "take-home pay," leading to a lack of transparency in how much the government takes from their hard-earned money.
To address this issue, there is a call for workers to pay their income taxes in quarterly installments, similar to how freelance workers and self-employed individuals manage their taxes. This approach would increase awareness of the government’s tax collection and spending practices, empowering individuals to understand the extent of financial contributions.
As DOGE sheds light on rampant waste and fraud, there are calls for President Trump to advocate for the elimination of tax withholding at the earliest opportunity. This move would prevent the Internal Revenue Service from receiving taxpayers’ money before workers receive their earnings, potentially curbing government power and reducing the occurrence of waste, fraud, and abuse.
In conclusion, the revelations from the DOGE hearing underscore the need for greater transparency and accountability in government spending. By reevaluating tax withholding practices and promoting a more conscious approach to taxation, there is an opportunity to mitigate wasteful expenditures and enhance fiscal responsibility.
