Given how bad people are with money, the number of people who can't pay their taxes would skyrocket if withholding is replaced with the scheme you are proposing.
Let's say somebody makes 100,000 USD a year and pays 40,000 USD in tax on it. Today, they see 5000 USD on their account every month. Sometimes it gets adjusted a little up or down, depending on what they did on the side, had some stocks, mowed the neighbors lawn, whatnot. But their lifestyle is generally adjusted to 5000 USD a month. Housing, utilities, entertainment, restaurants, hobbies. Now tomorrow we switch to a scheme where they instead get 8333 USD on their account every month, and a 40,000 USD bill every spring. You'd be surprised how many people would adjust their lifestyle, with direct consequences even for tax revenue. You can even imagine a new loan sector that offers you those 40,000 USD in spring that you then can pay off over time. Great, now the monthly payments essentially go through a bank before ending up as tax, but the bank takes their cut. Everybody loses. (Well, except the bank.)
Now you could argue that's the individuals' problem. Get better with money. Educate people, teach it to kids in school. (Really? The education sector is already overwhelmed as-is.) That's not how society works though. Even if the well-off educated elites would like (which is what the HN crowd is part of, no offense..). Humans are not rational agents. If they were, the world would look very different.
>Given how bad people are with money, the number of people who can't pay their taxes would skyrocket if withholding is replaced with the scheme you are proposing.
If I was optimizing my actions based on what would create the most anti-tax sentiment, this would be a positive outcome, not a negative one. What's worse than a bill from the government? One you can't afford to pay and that causes you to take on debt.
To be clear I'm not optimizing my behavior on such a metric nor advocating for others to do so. I was talking about the purposed hypothetical of lawmakers who were making such an optimization and what sort of laws they would, in theory, be supporting.
Let's say somebody makes 100,000 USD a year and pays 40,000 USD in tax on it. Today, they see 5000 USD on their account every month. Sometimes it gets adjusted a little up or down, depending on what they did on the side, had some stocks, mowed the neighbors lawn, whatnot. But their lifestyle is generally adjusted to 5000 USD a month. Housing, utilities, entertainment, restaurants, hobbies. Now tomorrow we switch to a scheme where they instead get 8333 USD on their account every month, and a 40,000 USD bill every spring. You'd be surprised how many people would adjust their lifestyle, with direct consequences even for tax revenue. You can even imagine a new loan sector that offers you those 40,000 USD in spring that you then can pay off over time. Great, now the monthly payments essentially go through a bank before ending up as tax, but the bank takes their cut. Everybody loses. (Well, except the bank.)
Now you could argue that's the individuals' problem. Get better with money. Educate people, teach it to kids in school. (Really? The education sector is already overwhelmed as-is.) That's not how society works though. Even if the well-off educated elites would like (which is what the HN crowd is part of, no offense..). Humans are not rational agents. If they were, the world would look very different.