The 1992 election campaign has barely begun, but every wage and salary earner in America now has a chance to vote on part of President Bush's economic recovery package, a key campaign issue.
Instead of asking for a ballot, they can ask their employer for a W-4 form and decline the lower tax withholding rate in the Bush plan. Or they can take home a bit more cash with each paycheck.
New tax withholding schedules are to be implemented by employers starting today. The new schedules, which Mr. Bush called for in his State of the Union speech, are intended to cut tax withholding rates slightly and put a maximum this year of $345 -- for married people filing jointly -- into the pockets of low- and middle-income workers.
The change is automatic, affecting most workers subject to income tax withholding unless they opt out of the plan by filing a new IRS Form W-4 with their employer.
Bruce Clayton, national manager of human resource systems for the 370,400-employee Sears, Roebuck and Co. Merchandise Group, said he has heard no reports of unusual demand for W-4s.
Under the Bush plan, a married person filing jointly stands to increase take-home pay by as much as to $345 this year; the increase for a single person is as much as $172.
These sums reduce whatever refund taxpayers might get next year or increase whatever tax they owe for 1992. The IRS said people who owe as a result of the change will not be penalized.
Withholding will not be changed for employees filing at the married rate with $90,200 or more in annual wages or salaries subject to withholding or single taxpayers receiving $53,200 or more.
To retain their current withholding, taxpayers should record on the W-4 form the same number of exemptions they have now. On Line 6 of the form they should indicate that they want more taxes withheld. How much more depends on whether they file as married or single.
Married people seeking to keep the withholding status quo will want to increase the withholding by an amount equal to $345 divided by the number of paydays left in 1992. Single people should increase withholding by $172 divided by the number of pay days left in the year, according to an IRS memo.