I 

114TH CONGRESS 

2D SESSION H. R. 6098 

To amend the Internal Revenue Code of 1986 to repeal the withholding 

of income and social security taxes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 21, 2016 

Mr. SANFORD (for himself, Mr. CRAMER, and Mr. BRAT) introduced the 

following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to repeal 

the withholding of income and social security taxes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Transparent Recogni5 tion of Unjustified Tax Hoarding in Government Act of 

6 2016’’ or as the ‘‘TRUTH in Government Act of 2016’’. 

7 SEC. 2. FINDINGS. 

8 Congress finds the following: 

9 (1) At the onset of the Civil War, Congress 

10 passed the Revenue Act of 1861, which imposed a 


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1 tax on personal incomes and to assure timely collec2 tion, taxes were ‘‘withheld at the source’’ by employ3 ers. 

4 (2) The need for Federal revenue declined 

5 sharply after the war and in 1872, the income tax 

6 was abolished and along with it, the Federal with7 holding mandate. 

8 (3) With passage of the 16th amendment to the 

9 Constitution, Congress swiftly passed legislation cre10 ating a Federal income tax, withheld before em11 ployee salaries were paid. 

12 (4) In response to growing taxpayer criticism of 

13 the withholding mandate, Treasury Secretary Wil14 liam G. McAdoo stated that ‘‘it would be very ad15 vantageous to . . . do away with the withholding of 

16 income tax at the source’’ because it would ‘‘elimi17 nate a great deal of criticism which has been di18 rected against the law’’; a statement reflecting the 

19 sentiment which ultimately led to the repeal of Fed20 eral withholding authority in 1917. 

21 (5) In the 1920s and 1930s, income taxes were 

22 due on March 15 following the end of the tax year 

23 and could be paid either in one lump sum on that 

24 date or in quarterly installments. 


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1 (6) With the onset of World War II, fearing 

2 that taxpayers might refuse to pay the higher tax 

3 rates and surcharges associated with funding the 

4 war effort, Federal officials, lawmakers, and political 

5 leaders such as President Franklin D. Roosevelt 

6 used the military crisis to draw on Americans’ sense 

7 of patriotism and resurrect the Federal withholding 

8 authority as a ‘‘temporary wartime measure’’. 

9 (7) The campaign to reinstitute a permanent 

10 system of withholding overcame public hostility with 

11 the passage of the Withholding Tax Act of 1943 

12 which incorporated suggestions proffered by Beards13 ley Ruml to eliminate individuals’ 1942 tax liabilities 

14 by counting amounts paid or withheld in 1943 as 

15 tax payments for that year. 

16 (8) Since that time, Congress has stubbornly 

17 refused to repeal the Federal withholding mandate 

18 contained in the Withholding Tax Act. 

19 (9) In fiscal year 2014, the Internal Revenue 

20 Service refunded overpayments amounting to over 

21 $330,561,145,000 more than actual individual in22 come tax liabilities, effectively denying interest pay23 ments otherwise owed to taxpayers and amounting 

24 to a hidden tax. 


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1 (10) These overpayments are returned annually 

2 in the form of tax refunds to taxpayers who often 

3 confuse the payments as a reward. 

4 (11) According to the Tax Foundation, in 2010, 

5 there were 58,416,118 tax returns with zero or neg6 ative income tax liability, or 41 percent of the 

7 142,892,051 returns filed. 

8 (12) The absence of the Federal withholding 

9 mandate leaves employers and employees free to ne10 gotiate alternative, private means of collecting and 

11 paying Federal income taxes, thereby allowing indi12 viduals to voluntarily earn interest on their 

13 withhholdings. 

14 (13) The Federal withholding mandate allows 

15 the Federal Government to disguise tax increases 

16 and hampers Federal accountability and trans17 parency by requiring the assistance of an inter18 mediary tax collector. 

19 (14) Complying with the Federal withholding 

20 mandate imposes costly burdens and legal liabilities 

21 on employers forced to act as de facto IRS agents, 

22 without compensation for lost time and resources. 

23 (15) Referring to the Federal withholding man24 date in his work Public Finance in Democratic Proc25 ess: Fiscal Institutions and Individual Choice, 1986 


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1 Nobel Prize winning economist James Buchanan 

2 stated that ‘‘The individual who does not have pos3 session of income before paying it out cannot’’ sense 

4 ‘‘the real cost of public services in a manner com5 parable to that experienced in a genuine act of 

6 outpayment’’. 

7 (16) In a CATO Institute study, Charlotte 

8 Twight has noted that ‘‘[W]ithholding is the para9 mount administrative mechanism enabling the Fed10 eral Government to collect, without significant pro11 test, sufficient private resources to fund a vastly ex12 panded welfare state.’’ 

13 (17) The National Taxpayers Union notes that 

14 the incremental nature of withholding masks the 

15 true cost of Federal income taxes, which would be 

16 much more apparent if individuals had to write 

17 monthly, quarterly, or annual checks to the Federal 

18 Government. 

19 SEC. 3. PURPOSE. 

20 The purposes of this Act are— 

21 (1) to increase transparency and accountability 

22 in the Federal tax system by providing the public 

23 with a more accurate account of— 

24 (A) the annual tax burden; and 

25 (B) the Federal budget deficit; 


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1 (2) to decrease the overall tax burden and in2 crease the personal wealth of taxpayers by allowing 

3 for the personal collection of interest during the fis4 cal year on overpayments that are otherwise used by 

5 the Federal Government to partly avoid interest pay6 ments; 

7 (3) to decrease the burden on employers by 

8 freeing them from the task of collecting income tax 

9 withholding from their employees; and 

10 (4) to end the deceptive practice of masking 

11 higher tax rates from taxpayers. 

12 SEC. 4. REPEAL OF FEDERAL INCOME AND SOCIAL SECU13 RITY TAX WITHHOLDING MANDATE. 

14 (a) IN GENERAL.—The following provisions of the In15 ternal Revenue Code of 1986 are hereby repealed: 

16 (1) Section 3102 (relating to deduction of social 

17 security tax from wages). 

18 (2) Section 3202 (relating to deduction of rail19 road retirement tax from compensation). 

20 (3) Chapter 24 (relating to income tax with21 holding). 

22 (b) REQUIREMENT OF ESTIMATED TAX PAYMENTS

23 FOR EMPLOYEE SOCIAL SECURITY TAXES.—Subsection 

24 (f) of section 6654 of such Code is amended by redesig25 nating paragraphs (3) and (4) as paragraphs (4) and (5), 


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1 respectively, and by inserting after paragraph (2) the fol2 lowing new paragraph: 

3 ‘‘(3) the taxes imposed by section 3101(a) and 

4 3201(a), plus’’. 

5 (c) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to amounts paid on or after the 

7 first January 1 occurring after 1 year after the date of 

8 the enactment of this Act. 

9 SEC. 5. CONTINUED VOLUNTARY TAX WITHHOLDING. 

10 (a) AUTHORITY OF THE IRS.—Nothing in this Act 

11 may be construed to limit the authority of the Internal 

12 Revenue Service to accept voluntary tax payments from 

13 employers electing to continue collecting Federal income 

14 taxes from employees. 

15 (b) VOLUNTARY EMPLOYER PARTICIPATION.—Noth16 ing in this Act shall be construed to prevent voluntary em17 ployer sponsored withholding of Federal income taxes on 

18 behalf of employees. 

19 (c) VOLUNTARY EMPLOYEE PARTICIPATION.—Noth20 ing in this Act shall be construed— 

21 (1) to require any employee to participate in an 

22 employer Federal income tax withholding system; or 

23 (2) to prevent any election of an employee to 

24 opt in to an employer Federal income tax with25 holding system, with all terms and conditions for 


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1 participation being negotiable between the employee 

2 and employer. 

Æ 


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