I vote "Other."
The problem with the story is that there's two extremes.
1) The companies collecting the money and paying the government at the end of the year.
2) The government collecting the paychecks and paying a portion of it to the earners.
I think the best thing to do would be a compromise: the companies collecting the money should pay the government at the end of every month.
That way, the government would get a more timely analysis of tax revenues without having to be so authoritarian about people's income.