4 ms·

I hear this sort of objection for all sorts of civil-service employment. TBH, I'm surprised we've never seen a proposal of the form "Federal employee salaries

by hakfoo 6y ago

I hear this sort of objection for all sorts of civil-service employment. TBH, I'm surprised we've never seen a proposal of the form "Federal employee salaries are not subject to income tax." With a single line of legislation, that makes all federal job offers immediately 10-35% more competitive, without actually increasing salaries directly. Once you get that as precedent, I could see it being used aggressively as a social tool: "We can't pay a public school teacher more than 60k, but we can pay them 60k tax-free, which is a little more competitive with a 75k private-sector position", for example.

flurben 6y ago
As far as federal employees go, making their salaries tax-free would cost the government lost tax revenue. It would also make a lot of voters angry because they still pay taxes, but "those bureaucrats in Washington DC exempted themselves from taxes." I can see the speeches now. Approximately 50% of American politicians are anti-government as an ideology, and use the argument of "cutting overpaid government salaries" as a plank in their economic policy, so having well-paid gov't staff is just "waste" in their minds. As far as teachers go, they are not employed by the federal government. In most states they are county-level employees and the counties obviously do not have authority to dictate federal income tax levels.
s1artibartfast 6y ago
I can't think of a worse solution. Sure, it effectively raises their salary, but it is full of moral pitfalls. It is already outrageous that government employees are exempt from social security taxes.
- andrewflnr 6y ago
  Uh, what? Former federal employee here. I've got one of my pay stubs in front of me and there is definitely a social security line.
  - s1artibartfast 6y ago
    It is primarily state employees (police & teachers) that are exempt from social security if they have a different state funded pension plan. Take a look at table 2 and chart 1 of this report from the social security administration[1] for some examples of rates in different states. >In 2018, one-quarter of state and local government employees—approximately 6.5 million workers—were not covered by Social Security on their current job I find this offensive because one of the main functions of SS is to subsidize the retirement of low earners at the expense of higher earners. As a private citizen, I don't get to opt out of this social obligation just because my 401k gets a better return. Not only that, but as a tax payer, I will be on the hook for bailing out the public employee pension funds when they go belly up. https://www.ssa.gov/policy/docs/ssb/v80n3/v80n3p1.html https://www.ssa.gov/policy/docs/ssb/v80n3/v80n3p1.html

by hakfoo 6y ago

flurben 6y ago

As far as federal employees go, making their salaries tax-free would cost the government lost tax revenue. It would also make a lot of voters angry because they still pay taxes, but "those bureaucrats in Washington DC exempted themselves from taxes." I can see the speeches now. Approximately 50% of American politicians are anti-government as an ideology, and use the argument of "cutting overpaid government salaries" as a plank in their economic policy, so having well-paid gov't staff is just "waste" in their minds. As far as teachers go, they are not employed by the federal government. In most states they are county-level employees and the counties obviously do not have authority to dictate federal income tax levels.

s1artibartfast 6y ago

I can't think of a worse solution. Sure, it effectively raises their salary, but it is full of moral pitfalls. It is already outrageous that government employees are exempt from social security taxes.

andrewflnr 6y ago
Uh, what? Former federal employee here. I've got one of my pay stubs in front of me and there is definitely a social security line.
- s1artibartfast 6y ago
  It is primarily state employees (police & teachers) that are exempt from social security if they have a different state funded pension plan. Take a look at table 2 and chart 1 of this report from the social security administration[1] for some examples of rates in different states. >In 2018, one-quarter of state and local government employees—approximately 6.5 million workers—were not covered by Social Security on their current job I find this offensive because one of the main functions of SS is to subsidize the retirement of low earners at the expense of higher earners. As a private citizen, I don't get to opt out of this social obligation just because my 401k gets a better return. Not only that, but as a tax payer, I will be on the hook for bailing out the public employee pension funds when they go belly up. https://www.ssa.gov/policy/docs/ssb/v80n3/v80n3p1.html https://www.ssa.gov/policy/docs/ssb/v80n3/v80n3p1.html