Question

A constitutional amendment allowing Congress to impose a federal income tax on individuals and corporations went into effect in 1913. Since then, Congress has passed many laws dealing with the federal income tax. One law that has an important effect on payroll work is the Current Tax Payment Act of 1943. What is the term used to describe this law and do you consider it a just law? What is the current administrations approach to this law?

Answer 1

Current Tax Payment Act of 1943, is enacted by congress in addition to Revenue Bill of 1943, which follows the approach of "pay-as-you-go" for collection system, i.e. it requires taxes to be paid immediately in the year in which income is earned instead of paying in the following year.

For the same purpose the provisions contained in the Act introduced the requirement of withholding of wages & salaries at the source by the employer for the collection of taxes. It keeps employees from spending that money & taxes are paid timely by the employees. It cannot be considered just a law as it also acts for the convenience of employees by making tax payment method proper & easy for them. Hence it is beneficial for both the employees & for ensuring proper tax collection system.

Currently this system of taxes has been considered tax burden on the citizens, hence to compensate, The Tax Cuts and Jobs Act (TCJA) reduced income tax rates from 39.6% to 37% for individuals & from 35% to 21% for corporate.