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4.15.2005

Personal Tax Savings Accounts

interesting:
A dollar earned on January 1st should earn 469 days of interest until the government gets it on April 15th. In 2002, $717 billion was withheld from worker's incomes according to the IRS. If this money was earned equally throughout the year, the average dollar earned would accrue 286 days of interest. If that withheld money were invested in 10-year T-Notes, rather than given interest free to the government, taxpayers would have increased their wealth by approximately $28 billion, or approximately $250 per withholding individual. This yield, and any overpayments, is rightfully the property of the worker and should be allowed to compound in the personal tax savings account tax-free and applied towards future tax liabilities. Alternatively, since these savings accounts are assets owned by the worker, excess funds could be withdrawn and taxed as income, rolled over into IRAs, passed on to heirs, etc. The action is simple -- let workers earn a return on their money while still entitled to it -- but the restored efficiencies are huge.

3 Comments:

At 10:22 PM, Blogger Andrew said...

Sigh... until you find out your tax liability falls below your calculated AMT. Then you have $0 in your personal account and the rest comes from your regular checking account. :P

 
At 10:51 PM, Blogger Ivan said...

You gotta get some mortgage interest payments stat

 
At 11:04 PM, Blogger Ivan said...

Actually, I don't think I know what I'm talking about. I am reading this now.

 

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