Federal Tax Withholding Act of 2005

The Federal Tax Withholding Act of 2005 proposed a fundamental change to how federal taxes are collected by repealing the requirement for employers to automatically withhold income, Social Security, and railroad retirement taxes from employee paychecks. Under this legislation, workers would receive their full gross pay each pay period but would become responsible for making periodic estimated tax payments directly to the government throughout the year. The bill aimed to shift the burden of tax collection from employers to individual citizens, requiring taxpayers to manage their own tax liabilities for both income and payroll taxes.