Why do government employees pay federal taxes?

[Cogman]

Now, I can understand at the state and local level the need for government employees to still pay taxes, but what about federal level? Wouldn't it be much more efficient to just give them a reduced wage with no federal income tax expected?

With the government being one of the biggest employers in the US, it makes sense removing the 180 layers of bureaucratic needed to process taxes for the 2+ million people currently employed by the federal government.

Just a thought, feel free to call it retarded, but please say why it is retarded.

 

[spidey07]

It would be illegal to do so. They already don't pay social security tax.

 

[Cogman]

It would be illegal to do so. They already don't pay social security tax.

So change the law that makes it illegal. Giving money to people only to take it back so that you can later give it to the same people seams like a circular and wasteful process.

 

[Brovane]

It is probably easier for everyone involved to just get taxed at normal.

For example the same thing happens for people that receive Social Security. Depending on your beneft level you might have to turn around any pay a portion of the benefits back to the federal government.

Also the same two people at the same pay level might not have the same taxes.

 

[Cogman]

It is probably easier for everyone involved to just get taxed at normal.

For example the same thing happens for people that receive Social Security. Depending on your beneft level you might have to turn around any pay a portion of the benefits back to the federal government.

Also the same two people at the same pay level might not have the same taxes.

It may have been initially, and a switch certainly would be cumbersome, but today 2+ million tax submissions are not peanuts for any organization.

As for tax breaks and such, it wouldn't be an issue to apply for the government for extra pay for whatever reason. That paperwork would still be less than the paperwork required with filing taxes.

 

[sactoking]

Now, I can understand at the state and local level the need for government employees to still pay taxes, but what about federal level? Wouldn't it be much more efficient to just give them a reduced wage with no federal income tax expected?

With the government being one of the biggest employers in the US, it makes sense removing the 180 layers of bureaucratic needed to process taxes for the 2+ million people currently employed by the federal government.

Just a thought, feel free to call it retarded, but please say why it is retarded.

At what rate? Does a fed employee who's single get the same "pay cut" rate as someone with 6 kids? How about one married to a Swiss Colony cheese hander-outer versus one married to the Head of Cardiothoracic Surgery at Johns Hopkins?

 

[OCGuy]

People dont pay tax at the same rate, even if they earn the same amount on their W-2. This would not work.

Some people have kids, some people own homes, etc.

 

[Cogman]

At what rate? Does a fed employee who's single get the same "pay cut" rate as someone with 6 kids? How about one married to a Swiss Colony cheese hander-outer versus one married to the Head of Cardiothoracic Surgery at Johns Hopkins?

Why not? That is essentially what is happening already anyways. The only difference is that you aren't calling it taxes. You could even still do employment audits to make sure that their wages are correct for their situation.

 

[Cogman]

People dont pay tax at the same rate, even if they earn the same amount on their W-2. This would not work.

Some people have kids, some people own homes, etc.

Why would it be impossible for the government to do yearly reviews of a persons situation? Why couldn't they say "You have kids, you got x amount. You don't have a home? you get Y amount."

 

[Dekasa]

Outside income must be taxed.

 

[IronWing]

It would be illegal to do so. They already don't pay social security tax.

Only the folks* hired prior to the mid-80s don't pay into social security or get social security. All the fed hires of the last 25 years do.


*Talking feds here.

 

[OCGuy]

Why would it be impossible for the government to do yearly reviews of a persons situation? Why couldn't they say "You have kids, you got x amount. You don't have a home? you get Y amount."

Yearly reviews? Now that sounds like you would have to setup an expensive committee to "go over everyone's situation" each year.

Tax write-offs dont work like that. There is no way to predict what they will be, and there is no reason to waste time and money attempting to do so.

 

[IronWing]

Why would it be impossible for the government to do yearly reviews of a persons situation? Why couldn't they say "You have kids, you got x amount. You don't have a home? you get Y amount."

Then you'd be paying gov workers to do the calculations that the workers currently have to do themselves at no cost to the government (taxpayers).

 

[Cogman]

Then you'd be paying gov workers to do the calculations that the workers currently have to do themselves at no cost to the government (taxpayers).

Yes, but I think that would be less then the workers that you pay to do different calculations to verify the calculations that were done by the workers themselves. Plus less money then tax fraud investigations, paperwork printed, and tax rebate printing.

It wouldn't be free, but I don't think it would be more expensive then what we are currently doing.

 

[OCGuy]

Yes, but I think that would be less then the workers that you pay to do different calculations to verify the calculations that were done by the workers themselves. Plus less money then tax fraud investigations, paperwork printed, and tax rebate printing.

It wouldn't be free, but I don't think it would be more expensive then what we are currently doing.

Just admit, you didn't think this through.

It's OK.

 

[Cogman]

Outside income must be taxed.

Yep. If someone has a second job they would have to be taxed for that job. That is how it is currently.

 

[bfdd]

50k a year, max salary no income tax taken on it.

 

[IronWing]

That paperwork would still be less than the paperwork required with filing taxes.

Likely not. We already have a system (and a very efficient system at that) for assessing taxes. Setting up a second system would be unnecessary duplication.

 

[Cogman]

Just admit, you didn't think this through.

It's OK.

I presented you with an idea. I never claimed it to be perfect or well thought out. The current biggest criticism is that of tax breaks for individuals, which I did think about before hand, and I still think it would be cheaper to do the calculations for wages vs the man power needed to handle filing taxes.

Heck, you could give people base income amounts and have them file for pay increases based on their current living situation, which wouldn't be much different from the current taxing system. (other than the fact that they wouldn't be paying taxes).

 

[sactoking]

Why not? That is essentially what is happening already anyways. The only difference is that you aren't calling it taxes.

Actually, in a lot of cases even if you don't call it a tax it can still be a tax and subject to the provisions. For example in Nevada where I live a personal income tax is illegal. The Governor has proposed cutting all state employee pay 5%. The Controller testified that such a move, while called a "pay cut" is in effect a 5% income tax on state employees and thus illegal. You can call it bread and circuses if you want but a tax is still a tax.

You could even still do employment audits to make sure that their wages are correct for their situation.

So, basically, you want to remove government inefficiency by eliminating the need for Fed employees to file income taxes but you'd have to verify certain facts so you'd need some agency to do that so either it's done by the IRS, in which case you've shifted the burden from the taxpayer to the gov't, increasing inefficiency, or a new agency has to be created with duties that overlap those of the IRS which also increases inefficiency.

 

[Cogman]

Likely not. We already have a system (and a very efficient system at that) for assessing taxes. Setting up a second system would be unnecessary duplication.

And I fully admit, that this has about a snowballs chance in hell of ever being implemented. I'm just putting the idea out there trying to get a feel for the pros/cons of it. Things don't have to be practical to be discussed.

 

[Cogman]

Actually, in a lot of cases even if you don't call it a tax it can still be a tax and subject to the provisions. For example in Nevada where I live a personal income tax is illegal. The Governor has proposed cutting all state employee pay 5%. The Controller testified that such a move, while called a "pay cut" is in effect a 5% income tax on state employees and thus illegal. You can call it bread and circuses if you want but a tax is still a tax.

This is why I specified federal taxes, specifically federal income taxes. The difference is not sending the money in a endless loop through the government.

So, basically, you want to remove government inefficiency by eliminating the need for Fed employees to file income taxes but you'd have to verify certain facts so you'd need some agency to do that so either it's done by the IRS, in which case you've shifted the burden from the taxpayer to the gov't, increasing inefficiency, or a new agency has to be created with duties that overlap those of the IRS which also increases inefficiency.

Why not use the IRS for the auditing? They already have the skillset to do individual circumstance investigation, I don't see why they couldn't do these audits. No new overhead.

 

[IronWing]

This idea would make it all but impossible to compare government salaries to private sector salaries. People seem to have trouble with that as things are even though government salaries and benefits are public info.

 

[Vette73]

It would be illegal to do so. They already don't pay social security tax.

FALSE


<-- Fed Gov Employee

 

[wuliheron]

One study showed that the employees of the IRS pay the lowest taxes; the implication being that they know better then anyone else what you can get away with. By making all government employees pay taxes they guarantee the government not only employees more people, but that the system pays for itself and possibly then some. If the government actually set out to make everything above board and simple then people might actually demand the same from politicians and corporations and that just wouldn't do.