(1) Withholding of income taxes originally was 
imposed as a means of meeting financial burdens 
created by World War II; the Treasury Department 
believed taking tax payments directly from workers’ 
paychecks would make it easier to fund government 
without objection from taxpayers. 
(2) Income tax liabilities have increased expo-
nentially since the imposition of withholding of in-
come taxes. Withholding taxes now represent a very 
substantial portion of working taxpayers’ paychecks. 
(3) Withholding of income taxes is inherently 
deceptive, because taxpayers often are not aware of 
the total amount of Federal taxes they pay or what 
percentage of their income they pay in Federal 
taxes. Thus, withholding taxes hide the true cost of 
government from taxpayers, making tax increases 
more feasible. 
(4) Many taxpayers overpay their Federal in-
come taxes every year through withholding taxes. 
The tax refund they receive is their own money, pre-
sumptively taken by the Federal Government. Be-
cause taxpayers receive no interest on overpaid with-
holding taxes, the Federal Government benefits from 
an interest-free loan of taxpayer funds. Taxpayers 
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would be far better served by saving or investing 
such money. 
(5) Withholding taxes impose an unfair burden 
on American employers, who incur tremendous costs 
complying with the Federal withholding scheme. Pri-
vate employers should not have to act as agents of 
the Federal Government by determining and col-
lecting income tax liabilities of their individual em-
ployees. 
(6) Withholding of income taxes effectively cre-
ates an unfair tax on amounts withheld. According 
to the Internal Revenue Service, the term ‘‘wages’’ 
excludes collected taxes within its definition. Yet the 
Service does not follow its own rule when it collects 
withholding taxes on a taxpayer’s total paycheck. 
(b) PURPOSE.—The purpose of this Act is to restore 
to taxpayers an awareness of the cost of government, by 
abolishing the withholding of income taxes. 
SEC. 3. REPEAL OF INCOME TAX WITHHOLDING. 
(a) IN GENERAL.—Chapter 24 of the Internal Rev-
enue Code of 1986 (relating to withholding from wages) 
is amended by adding at the end the following new section: 
‘‘SEC. 3407. TERMINATION. 
‘‘No tax shall be imposed by this chapter on any 
amount paid after December 31, 2007.’’. 
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(b) CLERICAL AMENDMENT.—The table of sections 
for such chapter 24 is amended by adding at the end the 
following new item: 
‘‘Sec. 3407. Termination.’’. 
SEC. 4. MONTHLY PAYMENTS OF ESTIMATED TAXES. 
(a) IN GENERAL.—Subsection (c) of section 6654 of 
the Internal Revenue Code of 1986 (relating to estimated 
income tax for individuals) is amended to read as follows: 
‘‘(c) NUMBER OF REQUIRED INSTALLMENTS; DUE 
DATES.—For purposes of this section— 
‘‘(1) PAYABLE MONTHLY.—There shall be 12 
required installments for each taxable year, one for 
each calendar month. 
‘‘(2) TIME FOR PAYMENT OF INSTALLMENTS.— 
The due date for each required installment shall be 
the 15th day of the following month.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Subparagraph (A) of section 6654(d)(1) of 
such Code is amended by striking ‘‘25 percent’’ and 
inserting ‘‘8.25 percent’’. 
(2) Clause (ii) of section 6654(d)(2)(C) of such 
Code is amended to read as follows: 
‘‘(ii) APPLICABLE PERCENTAGE.—The 
applicable percentage is— 
‘‘(I) 7.5 percent for the 1st re-
quired installment, and 
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‘‘(II) for each installment there-
after during the taxable year, the sum 
of 7.5 percentage points and the ap-
plicable percentage for the prior in-
stallment.’’. 
(3) Section 6654 of such Code is amended by 
striking subsection (j) and by redesignating sub-
sections (k), (l), and (m) as subsections (j), (k), and 
(l), respectively. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2007. 
Æ 
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