Government Begins Withholding Taxes From Wages And Salaries

1942

To pay the rising costs of World War II, the Roosevelt administration institutes a new system for collecting income taxes, mandatory “withholding from wages and salaries.” Under this system, employers are required to deduct the tax from an employee’s wages or salary before paying the employee. This system means that more people pay taxes earlier in the tax year and that the burden shifts to the taxpayer to collect any overpayments by filing a yearly tax return.