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Willisms

« Trivia Tidbit Of The Day: Part 201 -- Increases In Presidential Voter Turnout. | WILLisms.com | Behold The Nominee »

Quotational Therapy: Part 54 -- Good People With Occasional Bad Ideas.

A Great President With A Terrible Idea-

Compound interest. It's a powerful financial force that tens of millions of Americans benefit from each day.

You earn money on top of money you've earned on top of money you've earned. It's not a particularly difficult concept to understand, compound interest.

So, imagine if the government were to begin treating your earnings in the stock market like they treat the rest of your earnings. Imagine if you had taxes automatically withheld from your investment account(s), as you earn it.

Now, consider all of that compound interest you will be missing out on in the meantime. You'd essentially be robbed of earning money on top of money.

Withholding on interest and dividends is just a bad, bad idea. Terrible, even.

So, without further delay, here is today's quotational therapy:

Withholding 10 percent on interest and dividends will allow the Internal Revenue Service to recover (billions) ….. in otherwise lost revenues over the next 5 years — and that’s without taxing honest taxpayers a penny more than they now pay.

Past experience has proven that withholding is by far the most effective means of combating those who don’t pay their tax bill to the government. The only people who stand to lose under this law are those who haven’t been paying their taxes in the first place, and what’s wrong with that?

….. All of this raises an obvious question. If withholding is nothing more than a more effective collection method, what’s all the controversy about? Well, some of the banking interests seem to think withholding will inconvenience them. But we’ve taken measures to make sure this changeover isn’t burdensome. And as for savers, it will actually be a real convenience for many of them. For example, withholding will free many taxpayers from the chore of preparing quarterly tax payments. It will prevent other citizens from being faced with a substantial accumulated tax bill on April 15th. Most wage earners already prefer to have tax withheld from their paychecks, rather than having to come up with the whole bundle on that annual day of reckoning.

Some of the banks and savings and loans have said withholding will reduce the incentive to save. Well, that just doesn’t make sense. Withholding will have a minimal effect on accrued interest.

….. But I think most Americans would forgo (a little interest) if it meant others who are cheating on billions of dollars of unpaid taxes would have to pay their fair share.

Can you guess who uttered those words?

A hint:

He is a conservative hero.

Read more about this terrible idea, who came up with it, and what it means for President Bush and the Harriet Miers Supreme Court kerfuffle, at BizzyBlog.com.


-----------------------------

Previous Quotational Therapy Session:

Hurricanes & Personal Responsibility.

The right quote can be therapeutic, so tune in to WILLisms.com for quotational therapy every Monday and Friday.

Posted by Will Franklin · 31 October 2005 09:45 AM

Comments

Will, the BizzyBlog link is broken.

Posted by: WunderKraut at October 31, 2005 10:14 AM

Oops. Should be fixed now.

Posted by: Will Franklin at October 31, 2005 10:18 AM

Some have even suggested taking it to the next worst level and taxing unrealized gains as they accrue rather than as they are realized.

Posted by: KipEsquire at October 31, 2005 10:32 AM

Kip, that already happens in the isolated case of zero-coupon bonds, where you have to declare interest income on the bond's appreciation even though you have received no money to pay it.

But you are right that some have suggested extending the logic to stocks, housing appreciation, and the like, which would be about as sure a way to kill off the economy as I can think of.

As to the substance of this post, thanks to will for the link, and I believe the Alito nomination, coupled with a near-flameout of anything damaging from Plamegate, are the beginnings of a bigtime Bush recovery.

Posted by: Tom Blumer at October 31, 2005 12:27 PM