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Randa Abdelfattah and Ramteen Arablui

๐Ÿ‘ค Speaker
524 total appearances

Appearances Over Time

Podcast Appearances

Throughline
Al Capone and the transformation of the IRS

There are many people in Washington who knew that it might become increasingly difficult to collect the money.

Throughline
Al Capone and the transformation of the IRS

the IRS wasn't staffed up enough to keep track of that many new taxpayers.

Throughline
Al Capone and the transformation of the IRS

And so policymakers recognized early on that they're going to have to find some better way for these people to pay.

Throughline
Al Capone and the transformation of the IRS

And so in 1943, they thought, hey, let's put withholding in place because then we'll get it before the taxpayer ever earns it.

Throughline
Al Capone and the transformation of the IRS

Tax withholding.

Throughline
Al Capone and the transformation of the IRS

You know what I'm talking about.

Throughline
Al Capone and the transformation of the IRS

That one line on your paycheck that says federal income tax and how much was automatically taken out of it.

Throughline
Al Capone and the transformation of the IRS

And the idea is that a little bit will be taken out of your paycheck every two weeks or every month or every week, whenever you get paid.

Throughline
Al Capone and the transformation of the IRS

And then that will effectively pay your tax bill in pieces over the course of the year.

Throughline
Al Capone and the transformation of the IRS

This is the way we pay our taxes now.

Throughline
Al Capone and the transformation of the IRS

This was a win-win for the federal government because it did two things.

Throughline
Al Capone and the transformation of the IRS

One, this simplified and streamlined tax payment system meant the government would actually get the money it needed.

Throughline
Al Capone and the transformation of the IRS

And two, the IRS didn't have to be the one collecting everyone's money.

Throughline
Al Capone and the transformation of the IRS

Instead, your boss was going to do it.

Throughline
Al Capone and the transformation of the IRS

The federal government's sort of deputizing employers and saying, you're going to be our tax collectors.

Throughline
Al Capone and the transformation of the IRS

So take that money out of the paycheck for your employee and then send it to us directly.

Throughline
Al Capone and the transformation of the IRS

It was a drastic step in terms of government invasiveness.

Throughline
Al Capone and the transformation of the IRS

If there hadn't been a war on, I'm guessing you would have seen far more opposition to withholding.

Throughline
Al Capone and the transformation of the IRS

But the fact that there was, and everybody was pulling for victory, that made withholding much more palatable.

Throughline
Al Capone and the transformation of the IRS

And a lot of people thought it would only be temporary anyway, that it would go away after the war.