Would Cut Deficit by $5 Billion: Tax Payment Speedup Sought To Cut Deficit by $5 Billion
President Carter called on the nationÛªs large corporations yesterday to speed up withholding tax payments in an attempt to trim nearly So billion from the budget deficit in fiscal 1981.</br></br>Carter revealed the payment scheme as part of the $615.8 billion budget he sent to Congress. Without the faster tax payments, the proposed $15.8 billion deficit for fiscal 1981 would jump to $20.3 billion.</br></br>Under the Carter plan, many businesses will have to pay withholding taxes earlierÛÓerasing an opportunity for short-term investment of the funds.</br></br>Just as banks have reduced the ÛÏfloatÛ time between the date when a check is written and finally cashed. Uncle SamÛªs financial people have been studying what the Office of Management and Budget calls ÛÏcash management.Û</br></br>Businesses will be affected primarily by two changesÛÓone requiring congressional sanction and one that can be accomplished by administrative action: Û¢Earlier employer deposit of withheld income and payroll taxes and the employer share of payroll taxesÛÓThis step, which does not require congressional action, affects large employers and will be phased in during calendar years 1981 and 1982. Small companies, on the other hand, will face less of a burden; About 550,000 of the smallest; firms (quarterly withheld taxes of less than $1,000) will pay quarterly in the future while 980,000 employers with quarterly withheld taxes of $1,000 to $13,000 will make one deposit a month.