The purpose of this Act is to end the grievous theft and abuse of the incomes of wage earning Americans by the government. For way too long the Federal Government has withheld money for income taxes, from the paychecks of wage earners, on money that would never be taxed, because it is the amount covered by the Standard Deduction. The use of the income earner’s own money, for a year or more, which the government has happily appropriated, was done without paying interest for the use of that money, denying the earner and their family the use of that money, knowing full well the withholdings would have to be paid back upon filing of a tax return the following year from when the income was earned. The billions so appropriated by the Federal Government also removed those billions from the private productive economy and kept the money in government thus putting the brakes on the private economy by the amount of money incorrectly withheld.
This Act requires that this practice be stopped, and that Americans, starting with January 1 of each year, shall have no money withheld from any paycheck or any other form of wage compensation, for the purpose of income tax collection, until such time as their earnings exceed the Standard Deduction of $12,000 in 2019. The threshold of withholding shall be set at each Standard Deduction amount for all subsequent years. If the Standard Deduction is ever lowered below $12,000, that a baseline of $12,000 be established as of 2019, recalculated yearly based on the annualized rate of inflation, plus 1%, which shall be the amount at which withholding can begin, such that American wage earners never lose financial ground because of a Congressionally reduced Standard Deduction.
Title 26 of the U.S. Code shall be amended by adding the following sections:
26 U.S. Code, Section 3402 – Income tax collected at the source – Part (a) Requirement of withholding – subpart (1) In general — there shall be added new subparts (C) and (D), which shall read:
(C) however, nothing in the U.S. Code, IRS or Treasury enabling laws, regulations, or rules, shall contradict this part, which provides that no withholding of any kind or amount, of wage compensation in any form, shall commence until an employee has earned the amount of the Standard Deduction of $12,000 in 2019, which shall subsequently be indexed to every Standard Deduction by year. In the case of a Congressionally lowered Standard Deduction below the $12,000 threshold, that the established baseline 2019 Standard Deduction amount of $12,000, indexed to the annualized rate of inflation, plus 1%, shall be the point at which withholding of wages for tax purposes may commence.
(D) in the case of more than one wage earning job, the secretary shall propose rules which allow for the designation of a primary employer, where the $12,000 or adjusted amount annually shall not begin withholding until that job pays up to the point where withholding commences, and propose rules which also allow for the employee to work with all their employers to reach an agreement that withholdings shall begin when the cumulative earnings reach the threshold, or any other reasonable accommodation so that no withholding begins until after the established legal threshold.